It would make sense to sell it at that price if you had competitors. So Musk was essentially saying "we are going to create a monopoly and then milk the market for all it's worth". I found it weird that nobody criticised him for that back then.
The case was basically that for every $35k Model 3 that comes off the lot can be sold for a profit up to $35k, or be added to the robotaxi fleet where it can generate whatever revenue it can produce. For example, if every Model 3 could generate $5/h of profit, then running it 24/7/365 would be $44k.
Also electricity isn't free so that's going to be a substantial code and likely several sets of tires.