Well, they don't magically get cheaper to build just by building more. They get cheaper to build as the manufacturer refines the process, improves the technology, and scales the production lines to amortize the fixed costs of a production facility over a larger number of vehicles. That is, it takes work to make them cheaper, above and beyond just making more.
As long as there's sufficient demand, producers will have enough reason to scale up the production and work to bring the production cost down. Eventually, if all goes well, this begins a virtuous cycle where decreased price increases demand, and increased demand drives further cost reduction and innovation.
This works great if there's enough demand to kick-start the process. Unfortunately, the price of EVs today is too high to drive sufficient demand. Hence the carrot-and-stick incentives to try to jumpstart the virtuous cycle. On the carrot side are tax breaks and government subsidies / loan guarantees. On the stick side are fleet-wide fuel economy standards, price caps and quotas.
Right now, it seems as if most traditional auto manufacturers treat their electric cars either as halo cars, or as tasks they're required to do by law/regulation/whatever but would rather not. I doubt anyone at GM is staking the quarterly numbers on Chevy Volt sales, for example, but it doesn't stop them advertising it. The only competition at this point, though, is positioning, posturing and establishing a brand. That is, competition on the marketing front. The market's still too small to have meaningful competition driving the product development. At least, that's how it seems to me.
Eventually they'll figure out how to bring the costs down. Meanwhile, the early adopters hopefully help build interest and therefore demand in the future. When that happens, I'd expect the real competition to start. You'll see Toyota or GM or someone get into the mega-battery business, like Tesla is currently. Or some other major, bold move like that.
In the meantime, the carrot-and-stick will push both the supply and demand curves to the right, elevating the total units shipped to a modest number until the market can sustain itself.