Germany was fighting a multi-front war, whereas the Soviet Union was fighting on one (very large) front. They had been fully committed since Sept 1939 whereas the Soviets began fighting in earnest in the summer of 1941. When Barbarossa began the German army was already under-strength. Germany was also supplying their allies, whereas the Soviets were being supplied by their allies. Kursk was not representative of the casualty ratio of the Eastern Front which was closer to 2-to-1. Finally, be wary of simply lining up numbers of tanks.
Over-stretched
At the time of Kursk, had already fought in Poland (which was not the pushover it's made out to be), Norway, France, Yugoslavia, Greece, and Crete. They had to make good the losses from those campaigns, plus garrison all that territory, plus prepare for an invasion anywhere along the Mediterranean, Atlantic, and North Sea.
They were also fighting the Battle of the Atlantic, a significant drain on men and aircraft. They had just been defeated in North Africa. The Germans had been fighting an enormous war in the Soviet Union for two years. Their offensive capability had been ground up in broad and deep advances, and their finest army totally annihilated at Stalingrad.
Shortly after Kursk they had to contend with the invasion of Sicily, then Italy and the collapse of the Italians, and later the invasion of France. Plus Allied strategic bombing.
To say they were spread a bit thin is an understatement.
While total German tank strength was maintained at about 5000 to 6000, by 1944 about 1500 were in France and a few hundred in other theaters. The numbers here drawn from multiple sources show about 2500 German tanks on the Eastern Front, plus 1000 assault guns.
Tank Production
If you simply line up the numbers, the situation for Germany looks ok given their casualty rates. In 1943 the Germans produced 11,601 tank hulls whereas the Soviets produced 26,742. A 2.3:1 ratio which seems lower than overall casualty rates on the Eastern Front. Once you account that Germany only had about 60% of its army in the Soviet Union in 1943 now it's 3.8:1 which is very bad. It's when you look closer at what Germany is producing that things become disastrous.
German industry was so overstretched they continued to produce obsolete tank hulls rather than retool. One must keep this in mind when looking at German production numbers. For example, in 1943 Germany produced 11,601 tank hulls. But of those 3379 were Pz IIIs, 1,008 Pz 38ts, and 803 Pz IIs. Nearly 45% of their tank production was obsolete hulls.
They compensated for this somewhat by turning obsolete hulls into assault guns, tank destroyers, artillery, and anti-aircraft like the Marder, Grille, and StuG but these were not replacements for modern tanks.
In that same period the Soviets built 15,710 T-34s, 4,098 T-34 based assault guns, 719 KV and IS heavy tanks, 703 KV/IS based assault guns, and 3,348 light tanks and 2,109 light assault guns. This was something of a lull in Soviet heavy tank production, they would make 4,764 in 1944.
If we line up Soviet medium and heavy hulls with 60% of German Pz IV, Panther, and Tiger hulls things get dire. 6,320 vs 21,230 or 5.6:1. And that's before taking into account Lend-Lease tanks, about 7000 US and 5,218 British tanks over the course of the war. Now that 5:1 ratio at Kursk doesn't seem so bad.
This is a pretty crude analysis, but gives you some idea of the dire situation Germany was in.
Under-strength
From a production perspective, Germany began the war a few years ahead of schedule. When they invaded France in 1940 a significant bulk of their armor was still obsolete Panzer I and II tanks. At the start of Barbarossa they were still relying on the obsolescent Pz II and 38t tanks for the bulk of their tanks with insufficient Pz III and IVs. The Pz III was becoming obsolete itself. Germany would upgun the Pz IV, field the expensive Tiger, and design and begin production on the Panther.
Transport was insufficient for the long distances and bad roads they would encounter hampering their logistics. Petroleum was already becoming a limiting factor in German operations, that would only get worse and limit German training and mobility.
For Barbarossa, Germany committed 80% of their army, plus help from the Finns and Romanians, amounting to about 3.8 million men, 6800 armored vehicles (about 3500 tanks), and about 30,000 guns and mortars. The Soviets had 5.7 million men, 117,000 guns and mortars, and 25,700 mostly obsolete tanks.
But also consider that the Germans had been fighting for two years already at this point chewing up their reserves whereas the Soviet Union was just getting mobilized. Germany had a population of about 65 million whereas the Soviets had 196 million. The Soviets could and did replace casualties at a 3:1 ratio.
While the casualty lists for Barbarossa are staggering, their relative effect on the German army was much higher, plus the greater requirements of attacking. When Barbarossa began they had 163 divisions capable of offensive action. At the end of March 1942 they were down to 58. This greatly scaled back their operations. While Barbarossa attacked in three directions simultaneously, the Germans could only attack in one, south, in 1942. And while they made great territorial gains, it ground up their best offensive units.
To further underscore this, while on paper the German Army fielded 2.6 million soldiers in the East in Oct 1943, of that only about 1.2 million were combat soldiers. The rest were supply, security, and baggage train. With a 2000 km front, a single under-strength German division in 1943 had to cover 16 km.
Soviet military recruitment
German industry was still gearing up for "total war" when they launched Barbarossa, a combination of continuing to give lip service to the Versailles treaty, and also having to spend money on domestic projects. The Wehrmacht, too, was still building itself up in 1941 and was built for a short war. Thus the Germans were already overstretched when they invaded the Soviet Union and lacked reserves.
In contrast the Soviet Union had been preparing for war for a decade with 14 million reserves, former conscripts, 3 times the size of the invading German army. Thus they were able to rapidly replace loses with at least somewhat trained men. While the German army in the East always hovered at about 3-4 million men, the Soviets went from 5 at the start of the invasion, to 8 million at the end of 1941, and 11 million by the end of 1942. Thus even with 40% of its population under occupation in 1942, they could not only replace losses, but grow their army. They still outnumbered Germany 2-to-1.
By 1943 the bulk of Soviet production was reconstituted safely out of reach of German bombers, another shortcoming of the Wehrmacht was its lack of heavy strategic bombing capability. Meanwhile German industry was under increasing attack, shortages of fuel and materials were becoming worse, and it always remained something of an inefficient mess with multiple companies producing competing designs and set to fight one another for contracts.
Soviet counter-offensive
It's to be noted that the Germans were attacking at Kursk while the Soviets were defending. Defending means less movement which is less wear on vehicles, fuel, and supplies. But while Kursk was a last-ditch effort for the Germans, Soviet material superiority was so great they could both defend Kursk and prepare a counter-offensive. Even before the smoke of Kursk cleared, the Soviets were attacking the exhausted and thinned out Germans with 2.5 million men: Operation Kutuzov in the north and Operation Polkovodets Rumyantsev in the south. These were quickly followed by the Battle of Smolensk and Dnieper.
While these resulted in high Soviet casualties, and the Soviets did not get the encirclement they hoped for, they further depleted German front line units destroying their offensive capabilities. While the Germans could and did stage ferocious local counter-attacks and never broke, they no longer had the fuel, equipment, nor experienced men, to mass for an offensive. To do so would require thinning their already thin lines elsewhere and risk the very offensively capable Soviets breaking through. Any mobile forces had to be held in reserve to plug the gaps the Soviets were blowing in their lines.
Soviet losses and gains
While Soviet losses in these battles are spectacular, they are not representative of the Eastern Front as a whole. While the numbers are hard to pin down, Soviet military deaths are about 9 to 11 million with about 14 million wounded. German military deaths are about 5 million with about 7 million wounded. There's that 2-to-1 population ratio.
The astonishing 5:1 tank loss ratio was maintained through the war, though it dropped off severely to near 1:1 in 1945. A simple examination of the numbers shows how this was possible.
- Soviets start the war with 22,600 tanks.
- They produce 72,231 tanks.
- They receive 12,000 from lend-lease.
- They irrecoverably lose 83,500.
From a stock of 22,600 + 72,231 + 12,000 = 106,831 they lose 83,500 leaving 23,331 tanks at the end of the war. This is very close to the estimated 25,400 tank strength the Soviets had in 1945.
Conclusion
The Germany military was already overstretched when they launched Barbarossa in 1941 with insufficient transport, armor, and reserves. They expected a rapid collapse similar to France to win. When this did not happen it became a war of attrition with an enemy with much deeper reserves and fewer distractions. They were only able to keep up with loses by using lower quality troops and equipment, in particular cheaper, turret-less assault guns rather than real tanks. From 1943 on they had increasing commitments defending their empire draining resources from the Eastern front.
In contrast, due to years of conscription the Soviets started with a much larger army, more equipment, and deeper reserves to draw on. Despite horrendous losses in 1941 they were able to replace them from reserves and even grow their army. Even with 40% of their population in occupied territory they still outnumbered Germany 2-to-1 which matches the Soviet/German casualty ratio. While Germany was increasingly fighting on multiple fronts, the Soviets could focus on defeating the Germans. While Germany was being bombed and strangled and messing around with wonder weapons and complex designs, the reconstituted Soviet industry was safe behind the Urals and turning out brutally efficient equipment. While Germany had to supply its own allies, the Soviets were being supplied by theirs.
In 1941 the German army had the offensive power to attack on the entire Eastern Front. They took heavy loses they could only partially recover while facing a reconstituted and even larger Soviet army.
1942 required channeling their dwindling offensive capability into one front, the south through the Caucuses, grabbing much territory but leading to the devastating loss of an entire army they could not recover.
In 1943 they could manage one major offensive: Kursk. This was their last chance to win the war in the East before the inevitable Allied invasion in the West would further dilute their strength. When it failed, they were done.
See also
I'd recommend Military History Visualized's playlist on the Eastern Front for more detailed analysis and numbers.
I also drew from The Eastern Front, 1943-1944: The War in the East and on the Neighbouring Fronts much of which is available on Google Books.