HOME > BLOGS > 5 BATTERY LEASING GIANTS DRIVING THE EV REVOLUTION
Published Date: February 25, 2025
Attributed to rapid technological progress, rising environmental concerns, and extending government support, the global electric vehicle industry is on a path of continued growth and expansion. According to IEA facts and figures, with around 14 million new electric car registrations worldwide, the total number of electric cars on the road hit 40 million in 2023. These numbers are in line with the sales predictions made in the 2023 Global EV Outlook. Further, electric car sales witnessed a 35% growth in 2023 compared to 2022.
Battery leasing services is one key development the EV industry has seen so far. These services offer cost-effective solutions to EV ownership by decoupling the battery cost from the vehicle price. This helps reduce the initial financial burden on consumers while addressing concerns associated with battery maintenance and longevity. According to the latest report by Global Market Insights Inc. the global EV battery leasing service market reached USD 176.1 million in 2024 and is estimated to be worth USD 1.3 billion by 2034, exhibiting a CAGR of 22.4%.
This article will spotlight five leading companies making significant strides in the battery leasing service industry.
Headquartered in Ningde, China, CATL is one of the leading manufacturers of lithium-ion batteries for electric vehicles across the globe. The company came into existence in 2011 and has garnered prominence as a leading battery supplier serving major automotive giants, including Tesla, BMW, and Volkswagen.
In December 2024, at the Choco-Swap ecosystem conference, CATL introduced two new standardized battery models, #20 and #25. Based on their chemical makeup, these models are available in lithium iron phosphate (LFP) and nickel manganese cobalt (NMC) options, offering various energy capacities depending on user requirements.
The Choco-swap initiative is developed in partnership with nearly 100 companies and aims to streamline battery swapping for electric vehicles. With the introduction of a standard system, CATL plans to lower production costs, rev the development of new EVs by over six months, and solve challenges associated with battery quality, performance, and cost.
Concurrently in the same month, CATL's subsidiary CAES, partnered with CITIC Financial Leasing Co., Ltd., a financial leasing platform owned by China CITIC Bank. The partnership aims to advance the modular battery swapping system, improve battery swapping services, and make energy replenishment more convenient and efficient. This will help speed up the widespread adoption of battery swapping technology. As part of the contract, both companies will also collaborate in financial leasing, exploring various financial solutions to support the modular battery swapping ecosystem.
CATL, with its notable expansion into battery swapping, is on its way to revolutionize the EV landscape, particularly in countries like China. The company's battery leasing model addresses challenges related to charging time and infrastructure, which helps enhance the convenience and appeal of electric vehicles. To sum up, this initiative will help accelerate EV adoption, thus contributing significantly to global efforts to minimize carbon emissions.
NIO, a Chinese electric vehicle manufacturing firm founded in 2014, is known for its premium electric SUVs and sedans. The company has established itself as a global leader in the EV market through its distinguished use of innovative technologies and services.
Quoting an example, in March 2024, Nio revamped its Battery-as-a-Service (BaaS) program to make it easier for car owners to buy their batteries in the future while reducing monthly rental costs. Since the launch of this new policy over 70% of users have pivoted to the battery rental option. BaaS service was first introduced by NIO in August 2020 with the objective of making EV ownership more affordable by cutting the upfront cost of a car by at least 70,000 yuan ($9,870).
The company also joined hands with leading automotive manufacturers like Geely Holding and Changan Auto in October 2024 to work on battery swapping, including standardization, technology, network expansion, operations, developing swappable models, and managing battery assets.
NIO’s Battery-as-a-Service (BaaS) model has been a driving force in making EV ownership easier and more cost-effective. By separating battery ownership from the car, NIO helps ease concerns about battery wear and replacement costs. This not only makes EVs more accessible but also adds more value for buyers.
Sun Mobility is an India-based energy infrastructure and services provider with expertise in electric mobility solutions. The company emphasizes developing innovative battery swapping technologies and smart batteries to promote EV adoption, particularly in emerging markets.
For instance, in March 2022, Sun Mobility partnered with Hero Electric, one of the leading electric two-wheeler manufacturers in India with an aim to deploy 10,000 electric two-wheelers equipped with the former's smart swappable battery technology by the end of the year.
Similarly, in January 2024, the company partnered with Bounce Infinity to deploy over 30,000 Bounce Infinity Scooters in key Indian markets under both the Mobility-as-a-Service (MaaS) and Battery-as-a-Service (BaaS) models.
Sun Mobility is also making significant strides toward establishing a network of battery swapping stations across major Indian cities. These stations will cater to various vehicle segments, including two-wheelers, three-wheelers, and small four-wheelers. This, in turn, will help provide a versatile solution to the diverse Indian market. Citing an instance, in August 2024, SUN Mobility unveiled its plans to invest $1 billion in its newly launched HEV business by 2030. Some of this investment will also support the company's existing micromobility segment.
By offering a cost-effective and efficient battery leasing model, Sun Mobility has been addressing critical challenges that have hindered EV adoption in India over the years. These include range anxiety and long charging times. Such initiatives are expected to significantly contribute to the transformation of urban transportation in the country in the long run, which, in consequence, will promote sustainable and eco-friendly mobility solutions.
French multinational automobile manufacturer, Renault Group has been leading the automotive industry for over a century. In recent years, the company has intensified its focus on electric mobility by developing a range of electric vehicles and related services. For instance, in October 2022, Renault Group launched a company named The Future is Neutral that focused entirely on the circular economy. The new firm aims to become Europe’s leading circular economy company for cars by 2030.
Renault emerged as a trailblazer in offering battery leasing alternatives to its electric vehicle customers, allowing low-cost EV purchases by leasing the battery separately for a monthly fee. The program included battery maintenance and replacement guarantees, providing peace of mind to customers concerned about battery longevity.
While the automotive giant initially found success with its battery leasing model, it has recently pivoted towards offering batteries as part of the vehicle purchase. This shift sheds light on the evolving market dynamics and consumer preferences, as advancements in battery technology have led to increased confidence in battery durability and performance.
The American EV giant Tesla has been leading the way in battery technology and energy solutions. While Tesla initially gained recognition for battery swapping, the firm primarily aims to establish its Supercharger network for rapid charging.
Nevertheless, the EV giant offers leasing options for its vehicles and energy storage products, providing flexibility to consumers. For instance, in April 2022, Tesla Power USA announced an investment worth $1 billion over a period of 2 to 3 years to lease battery energy storage systems (BESS) under its new "power as a service" model. The company aims to support growing energy demand in India by offering BESS on a lease to Indian businesses. This model allows companies to shift from high CapEx to OpEx, making energy storage solutions more affordable and accessible.
Tesla Energy, the company's energy division, offers products like the Powerwall and Powerpack, which can be leased to manage energy consumption and storage. Tesla's integrated approach to vehicle and energy product leasing contributes to its mission of accelerating the global transition to sustainable energy.
With the positive outlook of the global EV sector, the battery leasing service industry is poised to register significant growth in the coming years. Several key factors are driving this trend:
With more companies foraying into the market and existing players expanding their existing portfolio of products and services, EV buyers are reaping the benefits of more flexibility and lower ownership costs. Separating battery ownership from the vehicle also eliminates worries about battery degradation and replacement expenses, making EVs a more appealing choice.
Battery leasing also helps maximize resource efficiency by ensuring batteries are reused and recycled properly. Leasing companies can manage battery life cycles more effectively, reducing waste and environmental impact.
Companies like CATL, NIO, Tesla, Renault, and Sun Mobility are leading the way, developing innovative leasing models that make EVs and clean energy solutions more accessible and affordable. As the industry grows, battery leasing will play a crucial role in the shift toward sustainable transportation.
By keeping ownership of the batteries, leasing companies can ensure standardized maintenance, second-life applications, and efficient recycling, paving the way for a circular economy in the battery industry.
Author: Pooja Sharma