People are very reluctant to purchase BEVs that do not have mileage comparable to ICEVs because conceptually EVs aren't common place and people don't understand they can start the day with a full tank every day.

There's a portion of the market who will compromise range just to have a BEV and I would imagine the Model 3 has cannibalized most of that market from the S and X.

Honestly when you're talking about vehicles that cost almost 100k, it's hard to quibble over a few thousand dollars savings from a smaller battery.