Not being in the UK, I have a slightly different viewpoint. I know the MG4 and M3 are very different cars in different price brackets. But the moment you start zooming out of the UK context, which is probably MG's largest market, things look very different. I will compare the base Model 3, with the Trophy, as it still has more gear than the MG.
Here's a price comparison between the two cars in some of the markets they sell in and their equivalent prices in £.
MG4 Trophy:
1. UK: £32,495.00
2. Netherlands: € 36,285 = £32,000
3. Germany: € 36,310 = £32,000
Tesla Model 3 (Standard / RWD):
1. UK: £43,000
2. Netherlands: €45,000 = £39,600
3. Germany: €44,000 = £38,700
4. USA: $43,000 = £35,800
*all pricing before subsidies and incentives.
While just looking at the pricepoint in the UK, it's easy to discount Tesla as a serious contender to MG right now, but outside, world over, we are already seeing people move over from MG to Tesla even before the 'Model 2' or the Gen 3 platform being released. I can bet that Tesla starts easily well under £25k, even closer to £21k in the US and maybe £23-24k equivalent in the markets with LHS steering.
I don't know why Tesla is more expensive in the UK, and I don't know the price point the next car will come to in the UK. However, it will be game over for MG in the rest of Europe once that happens.