Because of preferences other than long distance travel / autopilot. Some people really want a hatchback, some really just like Mercedes seats etc, some may just not want to be so cutting edge without instrument cluster, some may just want to get it now instead of after waiting for months...
...But for me I will replace our 2015 VW eGolf because I love the adventure of owning a Model 3, prefer teslas phone app integration over what I experienced with car-net who are now asking me to pay $15/month to keep using it after two years of using it for free. But I do like the hatchback of the eGolf, and the solid paint that doesnt get dirty as quickly and cleans up better etc. I'll still let it go for the T3.
So what it will do is cut into the margins of other electric vehicle makers, because with less range and less features they will be hard pressed to still ask $35k for their cars. And there will be some effect on more used vehicles being on the market, but at the same time awareness of electric driving and demand should go up. Maybe that even will keep the used car market prices high...
I do believe that at least some of the auto manufacturers will figure out how to build some decent competition eventually. There has to be some urgency on their part when Tesla begins to take away market share down market.
