Tesla Motors Inc. recently was dealt a setback in Texas, banned from selling its cars directly to drivers in that state, but in reality large car-dealer groups are “quietly supporting Elon Musk,” the electric-car maker’s chief executive.

That’s what analysts at Morgan Stanley said in a note Wednesday, adding that those publicly traded dealers — not named in the report — said they would be delighted with deregulation, which would even help their business.

Tesla sells and services its cars through its own stores and showrooms, which has irked most franchised car dealers.

Franchise laws vary by state. Maryland and New Jersey have recently allowed Tesla’s direct model, and a bill allowing it in Connecticut is headed for the state’s senate. Besides Texas, Tesla is fighting for direct sales in states such as Arizona and Michigan.

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Dealership associations and other industry groups have stated their role is to protect consumers from price fluctuations and other ills.

Large dealers, however, know that established auto companies have no interest in building out a network of company-owned stores, Morgan Stanley said.

“One dealer told us earlier this week: ‘There’s no way auto companies want to get into the downstream sales/service business in any significant way. The franchise model works on its own without laws to enforce it,’” Morgan Stanley said.

Tesla is only the first of “many” new car makers that will challenge existing car-retail laws, the investment bank said. “Tesla may be blazing the path in a state-by-state street battle… but we are very confident you will see numerous entities follow in Tesla’s footsteps, raising the scope of the legal challenge to the highest levels of U.S. governing and regulatory bodies.”

That doesn’t mean there won’t be some pain for some dealers, which Morgan Stanley estimated are part of a $1 trillion market “split ten thousand ways.”

There’s room for consolidation, it said. “While we can’t say precisely how many mega-dealers would be required to support the U.S. mobility fleet, based on numerous discussions with dealers, car companies and fleet managers on this topic we cannot rule out a consolidation from over 10,000 dealer groups today to ultimately as few as tens of groups in the future,” Morgan Stanley said.

And perhaps legendary investor Warren Buffett has seen some changes in the car retail model that the rest of us have not, Morgan Stanley says. Buffett bought the Van Tuyl dealer group in March.