To many, it would seem luxury electric car company Tesla Motors has been fighting an uphill battle against dealer organizations across the country that dissaprove of its direct-to-consumer sales model.

But the company is gaining ground, as it was announced this week it has reached a compromise with New York state, through which the company can continue selling its luxury vehicles directly to New Yorkers at its five current locations.

But with states like New Jersey — where the Motor Vehicle Commission approved a rule banning Tesla’s sales model — fighting to preserve the current dealership system, it is likely Tesla will continue to battle lawsuits for months to come.

That said, a game changer may be in the works in coming years.

Many in the industry have labled Tesla Motors as a small niche company that won’t pose much of a threat, even if its sales model is a bit controversial.

But reports in 2013 of Tesla’s plans to offer a more affordable model to arrive in late 2016 — Tesla  chief executive officer Elon Musk said in late 2013 the car which has been dubbed “Gen III” would cost roughly half of the starting $69,900 price tag of the flagship Model S — has many considering the larger implications of allowing direct-to-consumer sales.

The bottom line? A cheaper model potentially means a much larger market, perhaps encroaching on electric vehicle market share currently held by models such as the Nissan Leaf and Chevrolet Volt.

Brent Goldfarb, associate professor of management and entrepreneurship at the University of Maryland's Robert Smith School of Business and start-up company expert, says a lot is hanging in the balance.

Goldfard said the topic of whether is it a good idea for the automotive business to allow Tesla to sell directly to buyers might be a moot point.

“I don’t imagine the auto dealers will have a choice. It’s simply a matter of time,” he said.

What factors does “the inevitable” hang on?

Goldfarb said there are only two factors that might hold Tesla Motors back: “ (1) that Tesla is unable to successfully bring an affordable, high-quality, mass-market electric vehicle to market, and (2) no additional manufacturers (of non-electric vehicles) push to enter the market using a direct distribution model.”

Goldfarb gave the example of similar companies, Tata Motors Ltd. in India and Chery Automobiles in China, as examples of other up-and-coming auto manufacturers that could make a similar splash.

If, in fact, Tesla does succeed in bringing a more affordable option to consumers, the challenges will expand for dealers, says David Kirsch, also an associate professor of management and entrepreneurship at the University of Maryland's Robert H. Smith School of Business.

“Allowing Tesla to sell directly to consumers will not initially affect most dealers, only those selling competing luxury vehicles like Audi, BMW, Mercedes and Lexus,” said Kirsch, author of the revised dissertation The Electric Vehicle and the Burden of History, published by Rutgers University Press in 2000.

“For those dealerships, Tesla's challenge forces these incumbents to develop new ways of meeting and exceeding customer expectations,” he added.

Of course, a cheaper model will most likely largely widen Tesla's impact on the industry.

Dealers who are not quite as concerned about Tesla’s approach argue that the luxury automaker’s audience is so small currently that the company doesn’t pose much of a threat, but that could easily change.

“The answer depends upon whether Telsa is able to successfully bring an affordable, desirable EV to market. If not, then the threat may be minimal,” said Kirsch.

So far, the automaker has seen faster adoption in a few markets outside the U.S., in part due to environmental concerns.

“China is facing a near-catastrophic environmental crisis, and authorities there are pushing for the adoption of electric vehicles. Relative to other luxury brands (Porsche, Mercedes, etc.), Tesla is relatively affordable. Also, China has recently become the largest auto market in the world, so even a small slice of that market is likely to produce significant sales for a growing company,” Kirsch said.

He explained that Tesla is also popular in some of the smaller European vehicle markets like Norway and the Netherlands, “where consumers are concerned about the environment and where national governments do not have a domestic manufacturing base to protect.”

Though the company’s footprint in the U.S. remains small, many in the industry think the evolution of the Tesla lineup and the direct-to-consumer sales approach is a sign of future changes and integral shifts in the industry.

Historically, technological changes have frequently reshaped markets, Goldfarb shared, offering the following example.

“The current dealer-based distribution model is itself an outgrowth of the rise of mass production in the early decades of the 20th century. Manufacturers needed dealers to optimize product mix for local markets, hold inventory to smooth production, and provide a point of contact with emerging brands and companies that could not be present in every market,” Goldfarb said.

Has this model runs its course?

Kirsch says, “Not entirely.”

“Dealers still provide many of these same services to the manufacturers, but does a new entrant (Tesla, in this case) necessarily need a dealer network? Probably not,” he asserted.

Regardless of whether Tesla is successful in its fight to sell directly to consumers and bring an affordable vehicles to the market, it is apparent the car-buying environment is changing, with car-sharing networks, direct-to-consumers sales, and private seller numbers growing.

Do these factors have the potential to change the way automotive dealers operate in the U.S.?

Kirsch says, “Absolutely,” but states many of these changes has been in the works for a while.

“For instance, Internet-based advertising and lead generation has been around for over a decade. Multi-brand, mega-dealers have also changed the bargaining dynamics between dealers and manufacturers,” Goldfarb said.

He went on to suggest that dealers can and should consider responding to the Tesla challenge through a different route than filing more lawsuits. For more insight from analysts on ways the U.S. dealer network can respond to challenges stemming from Tesla's direct-to-consumer sales model, stay tuned to Auto Remarketing Today.

More information regarding the University of Maryland's Robert H. Smith School of Business can be found here.