Or maybe it's because that's what people buy, since diesel is cheaper than the upfront cost of an electric car.
I think it is a big fallacy to claim that Diesel cars are so popular, if you consider how the public has been mislead about the illegal levels of pollution produced by the cars and that they have been sold without a working exhaust cleaning. Besides that affordable electric cars are a very recent thing, are Diesel engine cars going to be popular, if they are more expensive to buy (1-2k) and operate (regular AdBlue refill)?
They might not have been practical, but affordable lead-acid based EVs already existed during the rise of small diesel.
>more expensive to buy (1-2k) and operate (regular AdBlue refill)?
Adblue is pretty cheap and isn't going to be used up that fast, most people are more concerned about the filter blocking up because of short commutes not leaving enough time for it to fully warmup.
Joking aside - Yes, German car makers are behind on electric vehicles, but all (except mercedes now) have one. They are late, they probably are at a disadvantage, but IMHO the game is not over yet.