AutoMobility Insights - September 2025 edition

Despite the holiday season and – again – extreme temperatures, August has continued to move the automotive ecosystem. The most visionary event is arguably Ford’s announcement of a novel, more radical approach to EV architecture and manufacturing. This is crucial not only to be competitive with EV leaders in the coming years, but also to achieve EV affordability and "margin parity" of EVs vs. ICE vehicles. Affordability is also critical for EV insurance, where recent UK data shows scissors opening between pressure on premiums and increasing claims cost, requiring decisive action by Insurers on costs. Tesla shows that used BEVs can actually be very affordable, as its started its version of multicycle in the US, to reduce the inventory the firm carries itself. Just as Hertz is extending its used car business through a partnership with Amazon, as performant remarketing is key for profitable holding of assets. This happens in addition to further events such as Porsche AG’s wind-down of its battery activities, a host of changes in automotive top management, a rumored acquisition of Athlon by Arval, an ICE engine partnership between BMW and Mercedes and many more. CVA and Qorus will continue to animate a Mobility Community that digs into concerned key topics, with our first seminar kicking off the season on September 16th.   

Ford has announced an overhaul of how it designs and builds EVs, in order to make them affordable and profitable. In August 2025, Ford unveiled its “Universal EV” platform and production system, calling it a potential “Model T moment” for the company. This initiative is backed by a $2 billion investment to upgrade its Louisville Assembly Plant, and $3 billion into a new BlueOval Battery Park to produce advanced lithium iron phosphate (LFP) batteries. At the core is a new EV platform engineered for simplicity, low cost, and versatility. Unlike Ford’s first-gen EVs fundamentally adapted from gasoline models, this is a clean-sheet design developed by a “skunkworks” team with talent hired from Tesla and Rivian. The first product will be a mid-size, four-door electric pickup truck in 2027, with a targeted starting price around $30,000. Ford plans to spawn a whole family of vehicles from this platform: Farley hinted at multiple SUVs and even a sedan based on the same architecture. 
 
CVA perspective:

Industry has struggled to come to terms with the new EV paradigm. Strategies ranged from quick ICE-to-EV adaptations (e.g., e-Golf) to hybrid platforms (BMW’s flexibility for powertrains…), full-BEV bets (Mercedes…), and quasi–pure plays (Renault’s Ampère…). While each had merit in years of market uncertainty, surviving the next five—against scaling new entrants like BYD & Tesl and disruptive, ever-improving Chinese rivals—demands industrial and distribution models on par with the shake-out winners, built around clean-sheet electrification, software-defined architectures and lean distribution. Recent moves by Ford, Renault, and BMW (Neue Klasse) signal recognition that a dedicated, fundamentally rethought approach is becoming non-negotiable to be around in 2030.

UK motor insurance premiums averaged £562 in Q2 2025, down £60 year-on-year and marking a second quarter of decline according to ABI. However, insurers still paid out a record £3.1 billion in claims, driven by rising repair bills (£2.1 billion) and higher theft costs. Whilst customers see some relief from historically high premiums, these claims costs continue to squeeze insurers due to pricier parts, more complex vehicle technology, and technician shortages; which insurers do not fully control.

CVA perspective:

The UK is already a highly competitive market for motor insurance, and these combined effects will continue to erode insurer margins and potentially lead to capital strain on high claims inflation. Insurers need to actively tackle the challenge through: pricing discipline & more personalized pricing, policy design more closely linked to risk (tiered coverage), working with OEMs on factors like theft control. In particular, cost-control is key. Insurers need to continue to strategically invest in their partnerships with garages / own-network to ensure volume pricing, parts flexibility, highly efficient & digitized processes & fast repair cycles (VoR time). Becoming a "Tech player" seems to be an obvious way forward to optimize in real time the different parameters of the value chain and to get to the lowest cost base possible.

Tesla has started to engage in used car (multi-cycle) leasing in Texas and California, offering certified pre-owned vehicles up to 7 years old on 12 to 24-month leasing contracts. The move reportedly followed a significant increase in Tesla’s used car inventory. This rise was driven by vehicle owners who sold or returned their cars also due to dissatisfaction with the political engagement of Tesla's CEO.
 
While brand perception has declined for some, Tesla has also seen a sharp drop in used car prices, making traditional auction-based remarketing both costly and damaging to resale values. Additionally, the sudden end of tax credits (as of September 30, 2025) for new and used BEVs, introduced by the new Trump administration, is expected to reduce demand significantly from October onwards. This development is pushing Tesla to reduce its inventory quickly. In response, Tesla is offering used car leasing contracts with no down payment and monthly rates as low as $208 for a 24-month term with a 10,000-mile annual limit — likely the most affordable way to drive a Tesla so far.

CVA perspective:

While it remains to be seen how successful Tesla’s move will be, it clearly highlights the importance of having direct sales capabilities for used car ownership and usage products - both for OEMs and large fleet owners. Tesla has also demonstrated how quickly a minimum viable product (MVP) can be launched, showing that it’s possible to act with great agility when developing new multi-cycle customer offerings. The wide range of vehicle ages included in the program also reflects strong confidence in the durability of the battery systems. However, correctly pricing vehicles across multiple life cycles—especially after a heavily subsidized first cycle - remains a significant challenge. That said, we remain confident that multi-cycle operations are an imperative brick in the optimized management of battery electric vehicle (BEV) assets.

Hertz Car Sales has joined Amazon Autos, allowing shoppers to browse, finance, and purchase from a selection of thousands of high-quality pre-owned vehicles. This strategic collaboration brings together Hertz Car Sales’ trusted nationwide inventory with the convenience of Amazon’s shopping and checkout experience.

For Hertz, this step represents an interesting additional remarketing channel. For Amazon Autos, it enables a new level of scale and marks an important expansion into the used car segment. Until now, Amazon Autos had worked almost exclusively with new vehicles from Hyundai, after earlier attempts with limited success e.g. with leasing players. The offer will initially launch in selected metropolitan areas in the United States and is expected to gradually expand to all Hertz Car Sales locations. Hertz shares, which had been heavily impacted by COVID and a largely unsuccessful BEV strategy, surged by up to 19% following the announcement.

CVA perspective:

Partnerships can be highly valuable - especially when they combine truly complementary strengths. In this case, Hertz can benefit from Amazon’s outstanding digital sales capabilities and online traffic, while Amazon can enter a new field of business relying on a well organized asset source. As a player with historically a large share of at-risk vehicles, optimizing remarketing is a critical component of Hertz' asset management strategy. While the ability to scale this partnership remains uncertain, players like Carvana have already demonstrated the enormous potential of digital, direct-to-consumer used car sales. Succeding with their partnership at scale will require an excellent customer experience, integration of processes favoring features and limiting costs (holding costs, refurbishment...) and business models with a "reasonable" pile-up of margins . Should the partnership work at scale, and be replicated by other RACs, a significant chunk of volumes would be carved out of the current ecosystem, impacting all incumbents (Dealers, wholesalers, used car portals, wholesalers, but also OEMs and Captives).

We are back in next week with the first CVA-Qorus Webinar of the next semester. In this session, we will be launching our 2025 annual report and doing a short re-fresher on key topics for the industry, plus some of the findings from our first Mobility Summit in May. We look forward to seeing you on September 16th! Register for this event