Tesla is in an infinite loop of building efficiencies and lowering manufacturing costs.

Elon has said many times that the lower the price of a car, the more market share opens up.

Their margins are in the 20-25% range whereas a legacy auto maker is below 13%.

There is a lot of room to cut prices and still make money.

Because they want to undercut all their competition. Their profit margins are insane compared to every other car maker especially in the EV space. It puts more downward pressure on Ford, VW, Kia, etc to cut into their already razor thin margins.

Tesla could sell the model 3 at 30K and still make a profit but they have zero reason to do that.

Because they have inanely high profit margins since their cars have something like 1/10th the number of moving parts, making them remarkably cheap to manufacture.

Lower prices = more market share.