A couple things, the second part first. When Tesla announced the Model 3 a long time ago, they said about $35,000 in "today's dollars", where today was a couple years ago now. A $40k price point in 2017 is pretty well within that statement.
The real price, after gas savings over 100,000 miles, puts the car at probably closer to $32-23,000. That's reasonable to define as a "mass market" price. Google tells me the Nissan Altima is the #1 car at the moment (stealing the spot from the Camry) and it's V6 model has an MSRP of $27,000, a price that will likely grow some by 2017. So, $40,000 is a reasonable target for a "mass market" car since Tesla can very reasonably say it's cost of ownership is fairly close to being on par with the best selling car in the US.
But, that $40,000 car has to be a good car, one folks will see as on par with an Altima or Camry. It can't be a 130 mile range Tesla version of the LEAF.