a throwback to the days when Detroit tried to undercut its franchise dealers by opening company-owned shops.
This seems to indicate that the same laws were good then & not good now. How?
Back then, Detroit was trying to pressure their own retailers to sell their cars at a lower markup. The law was Good (TM) for the retailers because it protected them from their suppliers. There were plenty of retailers to drive prices down through competition; they didn't need the suppliers to compete in the retail market.
Now, Tesla doesn't distribute to independent retailers, and they want to keep it that way, because they're not keen on having their products in the same showrooms as retailers showing other products. As far as they're concerned, Tesla is revolutionary, and would look queer and out-of-place amongst other vehicles with internal combustion engines.
Tesla doesn't trust retailers to present their product fairly in this context. And I can see their point: if their only contact with the consumer is the conventional auto retailer, you can bet all the other car manufacturers would freak out at having to share the showroom with Tesla, and would put pressure on the retailers to sing their own song.
In short, Tesla doesn't think the market will be fair to them unless they sell their product through their own stores. And since the retailers aren't selling their product, they're not competing with them, and so the law is an anachronism in this context.