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Extension of ev Tax Credit

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Why should the vehicles be subsidized at this point in the adoption phase with a $35K model on the horizon?
Because global warming is real... that’s a good reason. EVs can run on any fuel, so as we simultaneously move to higher mix of non carbon power, they reduce a big contributor. And EV adoption not yet near critical mass. Yes we are seeing some words and deeds from several automakers besides Tesla, but they’d deprioritize in a heartbeat without market pressure.
 
Because the average mid-sized car still sells for almost $10,000 less than that, plus it's good public policy to quicken the switch to electric vehicles since it makes your primary method of personal transportation fuel-agnostic?
Except that no car that Tesla makes is an "average mid-sized" car. The closest they come is the model 3 which is targeted at the introductory luxury market. I do however agree with your second point.