Yes, both sentences are correct, and the meaning is slightly different in each.
So far, they... have contributed greatly to improved vehicle design
Here, they have contributed to a [new] vehicle design that has been improved. The object of to is vehicle design, and it is modified by improved ("what kind of vehicle design? an improved vehicle design"). Here, improved is a past participle acting as an adjective to modify vehicle design.
So far, they... have contributed greatly to improving vehicle design
Here, they have contributed to the goal/act of making improvements on [the study/science of] vehicle design. The object of to is improving, i.e., the action or goal of making improvements. In particular, it is the act of making improvements to vehicle design. Here, improving vehicle design is a gerund phrase, where improving is the gerund noun and vehicle design is its object.
It's also possible to read this as they have contributed to the study/science of vehicle design, which is currently improving. A similar use might be "We invested in the growing company": we invested in the company, which was growing.