Elon said that the $35,000 Tesla Model 3 is designed such that roughly half the people will be able to afford the car. A fourth generation Tesla and smaller cars will ultimately be in the position where everyone will be able to afford the cars. [12:40 minutes into the video interview]
Elon Musk notes that all fossil fuel cars are heavily subsidized. Oil and gas companies get direct subsidies and do not have to pay for their environmental damage.
29 minutes into the video he talks about improving batteries. Tesla is improving costs with the gigafactory with economies of scale. Batteries improve at about 5-8% per year. The Gigafactory can make batteries 30% more affordable.