The clash pits a billionaire engineer, Elon Musk, against about 17,000 businesses, often family-owned, which are engines of their local economies, and which made substantial investments based on ground rules that require automakers work with dealers, not compete against them.
Over the years, dealers have sponsored Little League teams, supported local charities and forged strong ties with the state officials who regulate auto sales.
The conflict came to a head last year after Tesla introduced its Model S, a $60,000-plus sedan that aimed for a wider audience than the two-seat, $101,000 Roadster sports car it introduced in 2009.
Texas blocked Tesla from selling its cars directly in their states, while regulators in New Jersey ruled last week that the company must stop direct sales by April 1.
Colorado, Virginia and Georgia have imposed restrictions. Arizona also is battling it out with a measure moving this past week that is favorable to Tesla -- but with the hopes that the state could land Tesla's potential battery factory.
Tesla successfully fended off limits in North Carolina, Massachusetts and Minnesota last year. The two sides are currently battling in Ohio and New York.
Tesla currently operates 116 sales and service operations globally and aims to add another 90 or so by the end of the year, according to its most recent annual report. Sales are rising fast from last year's 22,477, but it is a niche player so far.
Tesla, which declined to comment to Reuters, argues that dealers don't understand its technology and have little incentive to sell an electric car that does not require its owner to return periodically for maintenance.
CEO Musk, whose charisma evokes comparisons with Apple's Steve Jobs, acknowledges the investment in local dealerships.
"Franchisees ... invested a lot of their money and time in building up the dealerships. That's a fair deal and it should not be broken," he wrote in a blog post this month.
Musk has said that he is not interested in overturning the existing franchise system, but he doesn't want to participate.
Dealers, however, see direct sales of any sort as an existential threat.
The franchise system was set up in the first half of the 20th century by automakers who did not want the expense of building up their own sales force.
Dealers say the existing system encourages competition that keeps car prices low and ensures that customers can still get their cars fixed if a manufacturer goes out of business. They point out that electric cars like the Nissan Leaf and the Mitsubishi i-MiEV are already in their showrooms.
"There are rules in place, and they're working," said David Shepherd, president of Shepherd Team Auto Plaza in Fort Scott, Kan. Dealers have periodically rebuffed attempts by U.S.-based automakers to sell themselves, but relations have been good in recent years, he said. "Do you want to run risk of having something change when it's not broken?"
Dealers also are politically active. Auto dealers and their employees donated more than $15.1 million to state and local candidates in the 2011-2012 campaign cycle, according to the National Institute on Money in State Politics. That's about the same amount contributed by real-estate agents, insurance agents and other influential groups that rely on state franchise laws.
Tesla employees, by contrast, donated $500 to state candidates during that period.
Tesla counters with its customers, a wealthy group who see themselves as defenders of planet-saving technology. Those involved in the Washington state effort say the visits, calls and e-mails from Tesla owners forced the auto dealers to back down.
"They realized they had a problem and very quickly began negotiating with Tesla," said state Rep. Reuven Carlyle, a Seattle Democrat who helped forge the compromise. He expects Gov. Jay Inslee to sign the bill, although an Inslee spokeswoman declined to comment.
In New Jersey, about 20 Tesla owners took part in a last-ditch effort to stop the Motor Vehicle Commission's proposed sales ban. The group next will appeal to Gov. Chris Christie to overturn the decision.
"I think it's far from over," said Michael Thwaite, a New Jersey telecommunications executive who is leading the effort.