For one, PM motors are more efficient, so long as you're not intent on building a hyperperformance machine. This makes them a better choice for daily-driven commuter vehicles. Not to oversimplify it too much, but AC induction motors have to use some of the electricity stored in the car's battery to generate the necessary magnetism within the motor. Permanent magnet motors have no need for this because they are made using, as the name suggests, permanently magnetic materials. This change has many cascading benefits, especially if you are trying to build a smaller, less-expensive electric car. A more efficient electric motor means you can use a smaller battery to achieve a given range, which not only lowers the price, but also reduces the battery's weight and footprint. A smaller and lighter battery in turn allows for a smaller and lighter car, which increases efficiency and range and reduces the need for a big motor even more. It's a self-reinforcing change that makes the Model 3 possible, as well as affordable.