Basically the value offered by the base Model S is modest but almost double the price when compared to the Model 3.
Unless Tesla greatly improves the craftsmanship in the interior and offer additional features in the Model S, it seems sales will be cannibalized.
I imagine a quick fix for that would be to charge more for the Model 3. Let's say if it is $39,950 for the base Model, it could still sell strong. The operational costs could make it very competitive against the Benz C300 and BMW 330i.