The powertrain is more powerful and more efficient than any other in its class. A lot of people don't care about paint or trivial fit 'n finish stuff.
Different people care about different things. If Tesla gets 0% of the "we care most about fit and finish" market, that's fine at Tesla's current market share.
Tesla's clearly an internals/advance core tech co vs. a design/polish co., because of Elon's personality (like most entrepreneurs), and so still attracts earlier adopters.
You can get a Chevy Bolt with perfect fit and finish!
100% of Tesla 3 owners would get an "S" if only they could afford it.
S is a different body size entirely, and Model 3 has some more advanced tech (e.g. more power-efficient) until S refreshed. 3 is actually cannibalizing S sales.
Perhaps I'm missing something, but how does anyone know that it's "cannibalizing" S sales rather than just "S sales are down?"
I had an S and traded it in for a Model 3. I ended up liking the Model 3 more since it's much more nimble and gets the latest software updates. The S was nice, but felt like I'm driving a boat.