Nio's "battery-as-a-service" model is the most promising battery leasing model yet

August 26, 2020
Last Updated:
August 26, 2020
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Truly disruptive

Although electric vehicles are competitive on a total cost of ownership basis in most regions, high upfront costs are still a barrier for many potential customers. Attempts to decouple the costs of the battery and the costs of the vehicle are not new, as Renault has offered a similar battery leasing option on its Zoe. The two reduce the vehicle cost by roughly $10,000 and are leased for between $100 and $150 per month. However, Nio's battery swapping network offers more flexibility to introduce new battery chemistries and allows customers to change their battery size while owning the vehicle. For these reasons, and the fact that it is bringing in partners to help finance the business, clients should view Nio's announcement as favorable.

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