Because the factory produces an entirely different model? Like, the machines don't manufacture the parts for the model they are importing from China? It's the same for every car manufacturer, they set up factories to produce specific cars.

It's certainly true that they're profitting off of the cheaper labor. I imagine their factory in Germany only has so much capacity and is tooled for manufacture of specific models. The original strategy with the resources they had lead them to break down their global manufacturing strategy in this way; but that's not to say they CANNOT do it differently, it just made fiscal sense due to probably a thousand different factors.

So I imagine that yes, they COULD move operations to the EU. But it's probably cheaper to fight legal battles and continue to operate this way for years while they're resolved in the courts.