There was a time when a dealer would invest in a building, a deal with car companies and then, car companies would look at what dealers sell more cars, and establish in front of them a competing dealership run by the company itself, which resulted in a better price, bankrupting the independent dealer.

But Tesla always sold their cars directly, there is no risk that they will compete with any third party dealership because they do not make deal with them. That is why that law does not make sense to be applied to Tesla. Its a shame Texas define themselves as one of the most free states and still have this law

The idea of non-OEM dealerships supposedly was originally to increase competition by preventing OEMs from competing with dealers to run them out of business, though it was likely way oversold since 100 years ago there were far more OEMs than there are now.

Today, when it's trivial to price compare online between different offerings from different OEMs, the entire structure of dealership laws exists to keep the large donations from those businesses flowing to politicians. I watched an online video of a Texas committee meeting with the public, and lobbyists, considering allowing such direct sales. The thing that jumped out to me was the political grandstanding about how dealerships donate "so much money to little league baseball teams, etc.", with no mention of their own significant reception of such monies, and with no discussion that removing the middleman of dealerships would mean less money extracted from the buyer to pay for all those shiny showrooms, meaning such money could be donated directly by consumers to their favorite organizations. But the most remarkable thing to me was watching the politicians greet the automobile dealers lobbyist with some pleasure by name when she got up to talk and mentioning how often they saw her.

It’s not just Texas. Most states have similar laws. In the past, most dealers were local, so it was easy for state politicians to put their interests over Detroit’s.

The Texas Auto Dealers Association has a remarkably strong grip on the Texas legislature.