They're going after the guy who wants a 3 series with instant torque. Range is a secondary consideration as long as it gets over 200.
The Model3 is their chance to break out of the luxury market and the Leaf is going to squeeze them really hard from the low end.
I think at the point, the main thing setting them apart is the Supercharger network. The financial viability of that endeavor is a bit unknown.. but if it translates into significant car sales, then it may pay off.
As someone who has driven a Model S, the experience is so much better than an ICE vehicle (acceleration, technology, not having to go to a gas station), that the other entry level luxury vehicles, while very nice, feel very obsolete and uninspiring.
I do, however, that the market will be much bigger than anyone anticipates because many will realize the cost is similar to a Camry after gas savings. I also think they’ll drive one of these vehicles and realize that it’s a much better experience than other vehicles.
Luxury car manufacturers are very good projecting who their customers aren't. To a certain extent, a car purchase says something about who you are not as well as who you are. A lot of iPhone buyers are saying I'm not an Android as much as they're saying I'm an iPhone user. A lot of Tesla's target customers for the Model 3 fall into the same category.