This new edition covers BYD's bold price cuts in China, sparking concerns of a global price war. We explore Mercedes-Benz’s strategic venture into battery recycling at its innovative Kuppenheim plant, demonstrating how sustainability can enhance profitability. Discover how Europcar Mobility Group is overcoming EV rental challenges, setting new standards in customer experience. Finally, we address rising BEV repair costs, highlighting the urgency for industry-wide cooperation to avoid hindering electric vehicle adoption. Stay informed and ahead of the curve.
BYD starts a new price war - at least in China
BYD has cut prices by up to 34% on 22 electric and plug-in hybrid models until the end of June 2025 in China, responding to a domestic market slowdown and a build-up of unsold inventory. BYDs move comes as a reaction to a slow-down in the Chinese BEV market and BYD significantly missing its own set sales target of a 30% increase in volumes vs. 2024.
The move aims to stimulate demand and clear stock, with key models like the Seagull and Han PHEV seeing deep discounts.
Analysts expect a prolonged price war, as rivals must either follow suit or risk losing ground in an increasingly price-sensitive Chinese market. In February 2025 BYD had announced the introduction of its autonomous driving software (Gods-Eye) in almost all of its new vehicle models. With current Level 2+ autonomous driving and the promise for future upgrades - introduced with no price increase - the company has not achieved its desired goal of a take-up in demand. The current discounts therefore largely apply also to "new" vehicles, with software more aligning on peers pushing the frontiers in the industry.
CVA perspective:
BYDs move is causing significant uncertainty even beyond China, as the market leaders' move to cut prices by >30% alarms the industry. A more detailed view however, reveals the specific context of BYD in China, where the temporary discounts of on average ~19% are mainly commercially driven to clear stock-levels from overproduction. The move is not supported by a step-change in cost reduction and hence financed dearly by margin, which makes it appear not sustainable. At the same time the price war in China and the willingness of players to sacrifice deeply their own margins should should not be underestimated ! From October 2025 BYD will start producing cars in Hungary and whether the market entry is an aggressive zero-margin undercut of traditional OEMs or a value game to cross-subsidize the price war in China with European margins, remains to be seen.
Battery recycling update
Mercedes-Benz has begun operations at its Kuppenheim battery recycling facility in Baden-Württemberg, with plans to process up to 2,500 tonnes of battery material annually - enough for more than 50,000 new battery modules. The plant employs a low-energy hydrometallurgical process to recover critical materials such as lithium, cobalt, and nickel from end-of-life EV batteries.
Kuppenheim is a core pillar in the Group’s long-term strategy to vertically integrate and localize battery value chains. While still in early-stage ramp-up, the facility is designed as a scalable blueprint for Mercedes’ circular material ambitions across Europe, with potential expansion depending on regulation and raw material dynamics.
CVA perspective:
Kuppenheim’s launch isn’t just a nod to sustainability, it’s a strategic bet on long-term asset value control. By internalizing battery material flows, Mercedes is setting the groundwork to capture terminal value that most OEMs still leave untapped.
Recycling capacity at scale allows OEMs to flatten residual value trajectories, hedge material volatility, and extend battery monetization beyond vehicle life. For BEV portfolio planning, this reinforces the case for multi-cycle models - with potential upside in component resale, recycling margins, and future remanufacturing.
The message is clear: OEMs or Fleet Operators that own their batteries at end-of-life may soon gain a structural edge in total cost of ownership, ESG compliance, and supply security. In an industry under pressure to prove BEV profitability, this might become one of the most underappreciated levers still on the table.
Update on BEV rental
An insight into Rental Car companies’ EV management has been given by Europcar Mobility Group’s UK subsidiary. It has increased rental days from 228,000 in 2023 to more than 1,241,000 in 2024, with 14% of cars now fully electric or plug-in hybrid. From 1st April 2025, Europcar introduced price parity on electric car and van rental rates for business account customers.
Rental rates of electric cars and vans now match their petrol/diesel equivalent, EVs are at least 80% charged at the start of a rental and only require 20% charge on return.
CVA perspective:
Among all mobility segments, rental is the toughest test-bed for EVs… Business travelers and occasional renters have neither patience nor appetite for charger hunts, broken CPs, incompatible cards or a 40-minute wait when their flight is already boarding. On top of that, RACs face operational headaches— charging queues in service points and a still-immature EV repair ecosystem that keeps EVs off the road longer than ICE vehicles. Yet OEMs will push ever more BEVs into rental fleets to stave off CAFE penalties, forcing rental operators to solve these customer-experience and uptime challenges fast. The upside: whoever cracks the charging logistics and keeps cars rolling first will capture growing customer enthusiasm and leverage higher EV penetration for better purchase terms from OEMs.
BEV repair and maintenance costs
As well as NC price rises, consumers are also facing increasing costs to maintain their vehicle. Having studied 1.5 million repairs in 2024, the SRA (Sécurité et Réparation Automobiles), which provides technical and statistical studies for motor insurers in France, reported that average vehicle repair costs increased by 25.7% since 2020, with both parts (+29%) and labour (+21%) contributing to the increased costs.
Whilst an argument for BEVs & PHEVs has always been that they support a lower TCO, the cost of each individual repair is significantly higher (~15% more than the average) due to their weight and more complex materials / electrical safety needs, as well as technology related costs. Even if EVs are less likely to be involved in crashes, this cost differential needs to be managed by the ecosystem, otherwise there is a risk that it drives up insurance premiums and becomes one more barrier for customer EV adoption.
CVA perspective:
In order for the ecosystem to continue to encourage EV uptake (which is necessary with regulation), we need to consider all factors of car ownership cost – not just the NC ticket price. For repairs, all players need to consider ways to best manage the costs: OEMs in terms of design to support battery protection as much as possible (as the most expensive component!), parts providers in making it easier to refurbish certain parts not just replace them, Dealers in terms of upskilling to support EV repair needs and avoid long (and expensive) wait times for EV work, Insurers in terms of working together with bodyshops & OEMs to continually improve understanding of crash risks and battery repair vs replacement approach. All players will need to work together to make sure that repairs to do not end up becoming an obstacle to PHEVs and EVs.