LG seems to be the key to this. They have found a way to build batteries at a significantly lower €/kWh cost than Panasonic/Tesla, so even at lower volume cars using those batteries are beating the M3 on range/price.
Maybe. The GM contract with LG that got leaked with the low price a while back locked GM into the price for an extended period if I remember right. Perhaps LG is taking a loss early in anticipation of making it up in the later part of the contract.