Telsa, like many startups, is pursuing a low-volume, price-insensitive market first. That helps pay for all sorts of startup and R&D costs, and lets them work out issues before they scale. Their long-term goal is, per Wikipedia, "eventually mass producing fully electric cars at a price affordable to the average consumer".

There are several fully electric vehicles in production that cost $35k.

http://en.wikipedia.org/wiki/List_of_production_battery_elec...

They have a substantially lower cost of operation than gas-powered vehicles, so they are plausibly cheaper to operate over the lifetime of the car:

http://en.wikipedia.org/wiki/Nissan_Leaf#Operating_costs

And over the long term, expecting batteries to get better is a pretty good bet. Everybody from Apple to Toyota is eager for battery improvements.