This was in response to California pushing for more efficient cars with the ultimate goal of zero-emissions.
What really helped Tesla was that they started out going for the sports car crowd. For someone's day to day workhorse car a lack of good support infrastructure is a big problem. People want that car to be useful for everything.
The people who could afford a $100k+ sports car could afford another car for when they needed to take the whole family somewhere, or take a long trip, or get groceries (the first generation Tesla Roadster's cargo capacity was less than that of a Mini Cooper convertible, about 1/3 of a Honda Civic or Nissan Sentra or Toyota Corolla). This meant that Tesla's market in the mid-2000s cared a lot less about EV infrastructure than the people who might have been interested in those '90s EVs.
There was another company making an EV sport car at the time, the AC Propulsion tzero. The people who founded Tesla actually founded Tesla because they saw that such a car would have a good chance of success but AC Propulsion wasn't interested in going into commercial production. They wanted to remain a technology company selling EV technology to others, rather than become a car company. So Tesla was formed, and licensed AC Propulsion's drive train and thus was born the Tesla Roadster.
So, everybody was making electric vehicles before Tesla? This is not how I remember it.