Batteries are by far the most expensive component of an electric vehicle, and swinging raw-material prices can make the task of lowering their cost more difficult. China’s NIO Inc. and Contemporary Amperex Technology Co. Ltd. aim to lighten that burden by allowing customers to lease batteries separately from cars, reducing upfront purchase costs.

The approach means customers can buy just the vehicle shell outright, while agreeing to pay rental fees for the battery. They can also replace the battery with a newer, improved one in the same car shell as technology rapidly advances.

Such a model could expand the potential pool of customers and help to spur sales at carmakers such as NIO, which announced a standalone battery business with CATL in Beijing on Thursday.
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