Well-known for its leading position in the Chinese electric vehicle (EV) market, NIO (NIO -2.93%) is spreading its wings. Today, the company announced the launch of its Battery as a Service (BaaS) subscription. Available with NIO's ES8, ES6, or EC6 models and featuring a 70 kWh battery pack, customers who participate in the BaaS program will receive a deduction on the vehicle's purchase price of 70,000 renminbi, or approximately $10,120, and pay a monthly subscription fee of 980 renminbi, or about $142. In addition, customers will still be able to receive tax incentives and government subsidies for EVs.

Speaking to the advantages of the BaaS subscription, William Bin Li, founder, chairman, and chief executive officer of NIO, said, "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." According to Li, NIO has already "deployed 143 battery swap stations across 64 cities in China, and completed over 800,000 battery swaps for our users."

An electric vehicle plugged into a charging station.

Image source: Getty Images.

Earlier this week, NIO, Contemporary Amperex Technology Ltd., otherwise known as CATL, and two other partners formed a joint venture called the Battery Asset Company. With an investment of 200 million renminbi -- about $29 million -- each, the four parties will each hold a 25% stake in the Battery Asset Company, which will purchase and own the batteries related to the BaaS program and then lease them back to subscribers.

Touting the announcement, Li said, "The advantages of our chargeable, swappable and upgradable battery swap technologies will continue to enhance competitiveness of NIO products, promote conversion to our premium smart EVs and create more values for our users." On first impression, this offering shows promise in lowering barriers to entry for customers interested in buying Nio vehicles. Time will tell how well the product resonates with customers and how well Nio executes.