I think the tax system understanding is fine, but I don't think that's why EVs tend to be luxury cars. It's a simple equation of cost. EVs are expensive to make. Until batteries are as cheap as a diesel engine, EVs will be more expensive. If someone is going to spend a *lot* of money on car, they want the car to reflect that they have spent a lot of money on it. A 50k+ car will be expected to be relatively luxurious and to have the latest tech and driver aids. Plus all manufacturers are competing with Tesla.[caveat: it's entirely possible I've misunderstood the tax system]
Cards on the table - if I'd had the option I wouldn't be driving an ID4. I'd be driving a Tesla Y. Why? The ID is very nice. But the Y has electric seats with seat memory, and electric tail life, just as much room, better charging infrastructure and an in-car tech system which is so far ahead of the ID4 the ID4 might as well be running Windows 2.9. Same amount of money to buy.