One word: plastics.
But if you are trying to ask, "How can Tesla prevent the Model 3 from cannibalizing Model S sales," then one answer is, "they can't" and the other answer is "but they don't have to worry about it, either."
I doubt BMW frets that every 3 Series sale is cannibalizing customers away from their more expensive products. They probably think- justifiably so- that they're creating a stylish onramp for buyers to move up the product line.
Robin
Cannibalize means someone eats. Freezing sales means nobody eats. It is like faking someone out on a football field. If signals are confusing, the defender (read purchaser whose action must be triggered) is frozen. There is no trigger. The adjective list looks like this:
Tesla Autonomous Super Charger Network Ludicrous Right Sized $27,500 Zero Emissions Beautiful Fast $35K Clean Safe Soon Better Best
The only points of differentiation most customers see between the S and the 3 are size, price and time. And there is ambiguity on all thee of those.
"How much smaller?" "About a foot." "What does that mean?"
"How much less expensive, for the 3 second car - the fast one?" "Oh, way less expensive." "Really?"
"When can I get a three?" "Production in 2017." "Oh,..."
... --- ...
A clear credible gradient between the two products would help:
Seats 7 Seats 5-6?
Ludicrous price difference?
Predicted delivery: A vs B
Long trips per year: Infinite vs 2.
How many super chargers are there?
Right now, in most people's minds, the 3 is an S in all respects, except a foot shorter and... a year of tuition at the best college in the country less expensive.
I am not sure that view is accurate. In March there were 611 super charging stations with 3,600 individual plugs.
Is this infrastructure going to work for everyone? Is the network over sold? Even if I buy an S?
Some sales tools that credibly spell out the differences for both S and 3 customers would make a big difference in the Tesla stock price. Today.