OStheer have better tanks than soviets - panther, tiger, elefant, stugs, but soviets can counter them. Su85 can keep tiger at bay, t34s can flank and kill elefant or play on part where elefant presence is lacking and so on.
You can clearly see that ostheer has super lategame advantage against soviets, but soviets can still hold their ground.
Can we stop it with the fucking fantasy time already? The Tiger hasn't been better than the IS-2 for over a year now (on the contrary, and I recently pointed out in perfect numbers why the IS-2s veterancy is only an additional expression of that superiority), and the Panzer IV costs so much more than the T-34 that it simply has to be better at something. Where things get complicated is the SU-76/StuG/SU-85/Panther matchup, because the Panther performs so vastly different to the SU-85 (not necessarily stronger, when both units are used right, but certainly easier).
So Soviets can hold their ground, not despite being so vastly inferior as you claim they are, but because they are much more evenly matched at that stage of the game. The Elefant of course introduces a certain AT superiority that the ISU can't match, but since both units don't exist outside of 4v4s anyway, their hunting area is too small to be of much relevance to the overall topic.