Chinese electric car manufacturer NIO (NYSE: NIO) on Thursday officially launched its battery-as-a-service model, touted as a way to reduce EV purchase costs. It also established the Wuhan Weineng Battery Asset Company, together with battery maker CATL, the Hubei Science Technology Investment Group, and a subsidiary of Guotai Junan International Holdings.
Instead of purchasing a car with battery, EV buyers pay a monthly subscription fee of RMB 980 (USD 141) to lease a 70 kWh battery package, the company said. The BaaS model allows NIO to offer prices starting from RMB 70,000 (USD 10,140) for its Nio ES8, ES6, or EC6.
The battery asset company will manage the battery package deals, while CATL is supplying the battery cells. CATL, Nio and its partners each will invest RMB 200 million (USD 28.9 million) and hold 25% equity interest in the company.
“The successful launch of the BaaS model will enable NIO users to benefit from the lower initial purchase prices of our products, flexible battery upgrade options, and assurance of battery performance,” said Nio founder and CEO William Bin Li. Users of the service will continue to enjoy existing favorable policies such as purchase tax exemption and government subsidies for EVs, the company added.