The Hongguang isn't competing with the Model 3, it's competing with electric bikes, which are even less safe: no airbags and if the wheels slip, your body might end up on the street.
So the Hongguang's success mostly shows that there's a large market of people who can afford something bigger than an electric bike, but not quite a "real" car.
I think it is a good idea. But aren't electric cars just using coal burning electricity?