Even if there were no improvements to be had in the vehicle itself, improvements in manufacturing processes determine how expensive the product is and thus how competitively priced the vehicle can be. Falling behind on price means falling behind on market share which means falling behind on efficiencies of scale which often means going out of business or at best becoming a niche producer.

Honda and Toyota weren't able to outcompete US manufacturers in the 1980s by offering higher performance vehicles but by delivering similar quality products at lower prices by making use of superior production techniques like Lean and JIT inventory management.

Are you serious? EVs have been the biggest disruption in the auto industry. It has created major corporations who made the attempts of traditional manufacturers seem obsolete.

VW Group and Stellantis totally failed to compete with Chinese manufacturers and were driven out of the Chinese EV market almost entirely. Competition is extremely fierce.

>That EVs are still expensive

Look up what they cost in China.

>So long as production is limited EVs will remain a luxury product

Around 50% of new sales in China. Not "luxury" in any meaningful way.

The issue is that EVs do not differentiate themselves by power train. They differentiate themselves by battery and software.