Nvidia-dkms 525.85.05 causes slowdown of desktop in hybrid mode

I am on a Nvidia Optimus laptop and for the last two nvidia-dkms driver releases there has been a slowdown of the desktop when they are installed.

In the latest nvidia-dkms 525.85.05 driver, when booting in hybrid mode the desktop becomes very laggy, the mouse becomes slow, windows take long to open and when they do any action within a window causes lag. It makes the system unusuable. However, this is only true if the laptop is projecting to an external screen via USB-C or HDMI. On the laptop screen there is no such issue.

I use my laptop connected to an external monitor so for me this is am important issue - i'd like to upgrade to new Nvidia drivers on archlinux but I am getting the above issues.