You cannot say the gap is widening just by looking at the difference from one quarter.
Yes the graphs show that the gap between Tesla and German makers increased between Q2 to Q3 but it decreased substantially between Q1 and Q2.
Overall, between Q1 and Q3 the gap has narrowed from Tesla having an over 3 times advantage in sales to less than 2 times.
The problem with slower growth in ID 3 sales may be that they are being hit more with the chip shortage than Tesla is:
VW takes stock of the performance of the ID.3 - electrive.com
Just over a year after the introduction of the ID.3, VW has taken stock of the market acceptance of the electric vehicle. According to the report, the
www.electrive.com
"However, Volkswagen, like many other OEMs, is currently struggling with the worldwide chip shortage. Due to the semiconductor crisis, the basic model of the VW ID.3 with the 45 kWh battery cannot be ordered at the moment. New orders will only be possible again from 2022."
Yes, Tesla is still more innovative as it managed to find a way round the chip shortage:
Tesla rewrote its own software to survive the chip shortage
“The global chip shortage situation remains quite serious.”
www.theverge.com
"We were able to substitute alternative chips, and then write the firmware in a matter of weeks,” Musk said. “It’s not just a matter of swapping out a chip; you also have to rewrite the software.”
I am sure that changes in company processes and culture are being made at VW to be able to better compete with Tesla.
Tesla is driving standards in the whole industry upwards and that can only be a good thing for consumers around the world.
