> have lost the capability of making tank tracks

Western Europe has certainly lost the capability of making even artillery shells at scale, let alone tank tracks, just look where we're at it now.

> as military technology typically comes first before any civilian application.

Diesel himself wasn't involved in any military thing, as far as I know, so I think you're wrong on that one.

The thing is that without a strong civilian industrial base focused on things adjacent to warfare (like the steel industry when it comes to building ships or artillery shells) any big power is going to come very short-handed in the next big war (assuming the war doesn't get nuclear, which is another discussion). So, if your country can't make diesel engines at scale, for whatever reason, then you can say goodbye to your logistics lines because you need lots and lots of trucks for said logistics as part of a continental war, i.e. forget the tanks.