If Tesla drives that money into development of the economy vehicle, they're going to scare a lot of car manufacturers.
For example, a lot of manufacturers are already developing electric vehicles for masses, just that they don't want to get their feet wet and they want someone else to do it first , so they can just jump in and join them if the market is actually ripe.
Mass adoption of electric vehicles is what most manufacturers fear and which is a valid concern, which is why Tesla's move is particularly so important.
Automotive industry is one industry where nobody is 'too late' for the party. As of now, I personally want to see Tesla succeed.
[1]Nissan, Toyota, Mistubishi, Chevrolet, Hyundai, BMW, Audi, etc. all have EV's in their roadmaps, some are budget EV's too.
Tesla could do the same with their supercharger network, where they offer free charging. Although I think (and hope) that eventually they'll let other car manufacturers "license" access to Tesla's network, and this way they'll be able to not only pay for the maintenance and cost of the network, but also make a bit of money from it, too. They shouldn't charge too much, though. Maybe $100 per car.
By turning the network into an actual business and not just a "cost", they would have to incentive and capital to expand the network all over the world as fast as possible.
And that's how we all get free charging for all cars, forever. Goodbye oil industry.
And co-incidentally, I am reminded of the Tesla-BBC fiasco...[1]
[1]http://green.autoblog.com/2013/03/10/uk-appeals-court-dismis...
(You doesn't literally mean you, but BBC in this case)
If he started being objective and serious, the show would be cancelled. As it in fact was before he pitched the new, less serious, format and convinced the BBC to relaunch the show.
Tesla will have to move down market, that will seriously restrict their profit per car. Where they are now with the S is in a price range which is less than twelve percent of the market but provides the majority of many automakers yearly profits. Get down to that below 40k mark and they are going to be in the same boat with everyone else. I doubt we will see a sub 40k car from them for years.
The sales figures of Leaf vs Tesla seem to suggest that people bought the Leaf when the Model S wasn't yet available and the Leaf was the best EV available, and largely lost interest after that.
It seems entirely possible that the legacy automakers' EV plans could turn out to be too little, too late.