Earlier quoted context omitted.
because the dealership's concern is not Tesla, whom they consider a niche player. Their concern is their manufacturers GM, Toyota, Ford will set up their own stores and compete with and undercut them. The dealerships have poured a lot of resources into their dealerships over the years and it is an anti-trust issue for them to compete directly with the much more powerfule manufacturers.
If they can't compete, that means they're not providing sufficient value. What value would I, as a consumer, enjoy by doing business with a local dealer rather than the manufacturer? I don't think the fear here is that they would "undercut them". I would do business directly with Ford, Toyota, etc. even if the price were the same. That's what they're afraid of.
Currently Most people don't pay the same price. The price you pay depends on how much the sales person can wrangle out of you. A fixed price from the manufacturer threatens the jobs and livelihood of car salesmen.
I am not defending the auto dealers. I am a Tesla stock holder. I am merely pointing out their enemy's position. This is part of why the limit on the # of stores puts the dealerships at ease.