diff --git a/src/app/template_set.ts b/src/app/template_set.ts
index c043f19a..0ad28ecf 100644
--- a/src/app/template_set.ts
+++ b/src/app/template_set.ts
@@ -1,10 +1,9 @@
 import { createBlock, html, list, multi, text, toggler, comment } from "../blockdom";
-import { compile, Template } from "../compiler";
+import { compile, Template, TemplateFunction } from "../compiler";
 import { markRaw } from "../reactivity";
 import { Portal } from "../portal";
 import { component, getCurrent } from "../component/component_node";
 import { helpers } from "./template_helpers";
-import { globalTemplates } from "../utils";
 
 const bdom = { text, createBlock, list, multi, html, toggler, component, comment };
 
@@ -48,7 +47,7 @@ function makeHelpers(getTemplate: (name: string) => Template): any {
     markRaw,
     getTemplate,
     call: (owner: any, subTemplate: string, ctx: any, parent: any, key: any) => {
-      const template = getTemplate(subTemplate);
+      const template = typeof subTemplate === "string" ? getTemplate(subTemplate) : subTemplate;
       return toggler(subTemplate, template.call(owner, ctx, parent, key));
     },
   });
@@ -63,11 +62,12 @@ export interface TemplateSetConfig {
 
 export class TemplateSet {
   dev: boolean;
-  rawTemplates: typeof globalTemplates = Object.create(globalTemplates);
+  rawTemplates: any = {}; //typeof globalTemplates = Object.create(globalTemplates);
   templates: { [name: string]: Template } = {};
   translateFn?: (s: string) => string;
   translatableAttributes?: string[];
   helpers: any;
+  bdom: any = bdom;
 
   constructor(config: TemplateSetConfig = {}) {
     this.dev = config.dev || false;
@@ -102,8 +102,11 @@ export class TemplateSet {
     }
   }
 
-  getTemplate(name: string): Template {
+  getTemplate(name: string | any): Template {
     if (!(name in this.templates)) {
+      if (typeof name === "function") {
+        return name(this);
+      }
       const rawTemplate = this.rawTemplates[name];
       if (rawTemplate === undefined) {
         let extraInfo = "";
@@ -126,7 +129,7 @@ export class TemplateSet {
     return this.templates[name];
   }
 
-  _compileTemplate(name: string, template: string | Element) {
+  _compileTemplate(name: string, template: string | Element): TemplateFunction {
     return compile(template, {
       name,
       dev: this.dev,
diff --git a/src/component/component.ts b/src/component/component.ts
index 220fb094..820c26c4 100644
--- a/src/component/component.ts
+++ b/src/component/component.ts
@@ -1,4 +1,6 @@
 import type { ComponentNode } from "./component_node";
+import type { TemplateFunction } from "../compiler/index";
+import type { App } from "..";
 
 // -----------------------------------------------------------------------------
 //  Component Class
@@ -20,7 +22,7 @@ export type ComponentConstructor<P extends Props = any, E = any> = (new (
   StaticComponentProperties;
 
 export class Component<Props = any, Env = any> {
-  static template: string = "";
+  static template: string | ((app: App) => TemplateFunction) = "";
   static props?: any;
   static defaultProps?: any;
 
diff --git a/src/utils.ts b/src/utils.ts
index 4b3cda78..89e1ef9b 100644
--- a/src/utils.ts
+++ b/src/utils.ts
@@ -75,13 +75,41 @@ export function markup(value: any) {
 // -----------------------------------------------------------------------------
 //  xml tag helper
 // -----------------------------------------------------------------------------
-export const globalTemplates: { [key: string]: string | Element } = {};
 
-export function xml(...args: Parameters<typeof String.raw>) {
-  const name = `__template__${xml.nextId++}`;
+export function xml(...args: Parameters<typeof String.raw>): any {
+  const subTemplates: any = {};
+  let hasSubTemplates = false;
+  for (let i = 0; i < args.length; i++) {
+    const arg = args[i];
+    if (typeof arg === "function") {
+      hasSubTemplates = true;
+      const id = `__template__${xml.nextId++}`;
+      subTemplates[id] = arg;
+      args[i] = `{{__owl__.subTemplates.${id}(__owl__.app)}}`;
+    }
+  }
   const value = String.raw(...args);
-  globalTemplates[name] = value;
-  return name;
+
+  let cache = new WeakMap();
+
+  return (app: any) => {
+    debugger;
+    let renderFn = cache.get(app);
+    if (!renderFn) {
+      let templateFn = app._compileTemplate("", value);
+      renderFn = templateFn(app.bdom, app.helpers);
+      if (hasSubTemplates) {
+        let origRenderFn = renderFn;
+        renderFn = (context: any, vnode: any, key?: any) => {
+          debugger;
+          context.__owl__.subTemplates = subTemplates;
+          return origRenderFn(context, vnode, key);
+        };
+      }
+      cache.set(app, renderFn);
+    }
+    return renderFn;
+  };
 }
 
 xml.nextId = 1;
diff --git a/tests/components/__snapshots__/basics.test.ts.snap b/tests/components/__snapshots__/basics.test.ts.snap
index 1b03db79..d891caae 100644
--- a/tests/components/__snapshots__/basics.test.ts.snap
+++ b/tests/components/__snapshots__/basics.test.ts.snap
@@ -169,11 +169,11 @@ exports[`basics can inject values in tagged templates 1`] = `
 "function anonymous(bdom, helpers
 ) {
   let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
-  let { getTemplate } = helpers;
-  const callTemplate_1 = getTemplate(\`__template__999\`);
+  let { call } = helpers;
   
   return function template(ctx, node, key = \\"\\") {
-    return callTemplate_1.call(this, ctx, node, key + \`__1\`);
+    const template1 = (ctx['__owl__'].subTemplates.__template__1(ctx['__owl__'].app));
+    return call(this, template1, ctx, node, key + \`__1\`);
   }
 }"
 `;
diff --git a/tests/components/__snapshots__/slots.test.ts.snap b/tests/components/__snapshots__/slots.test.ts.snap
index e98f2726..e82c5e38 100644
--- a/tests/components/__snapshots__/slots.test.ts.snap
+++ b/tests/components/__snapshots__/slots.test.ts.snap
@@ -249,11 +249,11 @@ exports[`slots can use t-call in default-content of t-slot 2`] = `
 "function anonymous(bdom, helpers
 ) {
   let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
-  let { callSlot, getTemplate } = helpers;
-  const callTemplate_1 = getTemplate(\`__template__999\`);
+  let { callSlot, call } = helpers;
   
   function defaultContent1(ctx, node, key = \\"\\") {
-    return callTemplate_1.call(this, ctx, node, key + \`__1\`);
+    const template1 = (ctx['__owl__'].subTemplates.__template__3(ctx['__owl__'].app));
+    return call(this, template1, ctx, node, key + \`__1\`);
   }
   
   return function template(ctx, node, key = \\"\\") {
@@ -772,12 +772,12 @@ exports[`slots mix of slots, t-call, t-call with body, and giving own props chil
 "function anonymous(bdom, helpers
 ) {
   let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
-  let { capture, getTemplate, markRaw } = helpers;
-  const callTemplate_1 = getTemplate(\`__template__1002\`);
+  let { capture, call, markRaw } = helpers;
   
   function slot1(ctx, node, key = \\"\\") {
     const b2 = text(\`[A]\`);
-    const b3 = callTemplate_1.call(this, ctx, node, key + \`__1\`);
+    const template1 = (ctx['__owl__'].subTemplates.__template__5(ctx['__owl__'].app));
+    const b3 = call(this, template1, ctx, node, key + \`__1\`);
     return multi([b2, b3]);
   }
   
@@ -790,41 +790,6 @@ exports[`slots mix of slots, t-call, t-call with body, and giving own props chil
 
 exports[`slots mix of slots, t-call, t-call with body, and giving own props child 4`] = `
 "function anonymous(bdom, helpers
-) {
-  let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
-  let { isBoundary, withDefault, setContextValue, getTemplate } = helpers;
-  const callTemplate_1 = getTemplate(\`__template__1001\`);
-  
-  return function template(ctx, node, key = \\"\\") {
-    ctx = Object.create(ctx);
-    ctx[isBoundary] = 1
-    const b2 = text(\`[sub1] \`);
-    setContextValue(ctx, \\"dummy\\", ctx['validate']);
-    ctx = Object.create(ctx);
-    ctx[isBoundary] = 1;
-    setContextValue(ctx, \\"v\\", ctx['props'].number);
-    const b3 = callTemplate_1.call(this, ctx, node, key + \`__1\`);
-    return multi([b2, b3]);
-  }
-}"
-`;
-
-exports[`slots mix of slots, t-call, t-call with body, and giving own props child 5`] = `
-"function anonymous(bdom, helpers
-) {
-  let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
-  
-  return function template(ctx, node, key = \\"\\") {
-    const b2 = text(\`[sub2\`);
-    const b3 = text(ctx['v']);
-    const b4 = text(\`]\`);
-    return multi([b2, b3, b4]);
-  }
-}"
-`;
-
-exports[`slots mix of slots, t-call, t-call with body, and giving own props child 6`] = `
-"function anonymous(bdom, helpers
 ) {
   let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
   
@@ -836,7 +801,7 @@ exports[`slots mix of slots, t-call, t-call with body, and giving own props chil
 }"
 `;
 
-exports[`slots mix of slots, t-call, t-call with body, and giving own props child 7`] = `
+exports[`slots mix of slots, t-call, t-call with body, and giving own props child 5`] = `
 "function anonymous(bdom, helpers
 ) {
   let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
@@ -850,6 +815,41 @@ exports[`slots mix of slots, t-call, t-call with body, and giving own props chil
 }"
 `;
 
+exports[`slots mix of slots, t-call, t-call with body, and giving own props child 6`] = `
+"function anonymous(bdom, helpers
+) {
+  let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
+  let { isBoundary, withDefault, setContextValue, call } = helpers;
+  
+  return function template(ctx, node, key = \\"\\") {
+    ctx = Object.create(ctx);
+    ctx[isBoundary] = 1
+    const b2 = text(\`[sub1] \`);
+    setContextValue(ctx, \\"dummy\\", ctx['validate']);
+    ctx = Object.create(ctx);
+    ctx[isBoundary] = 1;
+    setContextValue(ctx, \\"v\\", ctx['props'].number);
+    const template1 = (ctx['__owl__'].subTemplates.__template__4(ctx['__owl__'].app));
+    const b3 = call(this, template1, ctx, node, key + \`__1\`);
+    return multi([b2, b3]);
+  }
+}"
+`;
+
+exports[`slots mix of slots, t-call, t-call with body, and giving own props child 7`] = `
+"function anonymous(bdom, helpers
+) {
+  let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
+  
+  return function template(ctx, node, key = \\"\\") {
+    const b2 = text(\`[sub2\`);
+    const b3 = text(ctx['v']);
+    const b4 = text(\`]\`);
+    return multi([b2, b3, b4]);
+  }
+}"
+`;
+
 exports[`slots multiple roots are allowed in a default slot 1`] = `
 "function anonymous(bdom, helpers
 ) {
@@ -1486,13 +1486,13 @@ exports[`slots slot and (inline) t-call 1`] = `
 "function anonymous(bdom, helpers
 ) {
   let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
-  let { capture, getTemplate, markRaw } = helpers;
-  const callTemplate_1 = getTemplate(\`__template__999\`);
+  let { capture, call, markRaw } = helpers;
   
   let block1 = createBlock(\`<div><block-child-0/></div>\`);
   
   function slot1(ctx, node, key = \\"\\") {
-    return callTemplate_1.call(this, ctx, node, key + \`__1\`);
+    const template1 = (ctx['__owl__'].subTemplates.__template__2(ctx['__owl__'].app));
+    return call(this, template1, ctx, node, key + \`__1\`);
   }
   
   return function template(ctx, node, key = \\"\\") {
@@ -1505,19 +1505,6 @@ exports[`slots slot and (inline) t-call 1`] = `
 
 exports[`slots slot and (inline) t-call 2`] = `
 "function anonymous(bdom, helpers
-) {
-  let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
-  
-  let block1 = createBlock(\`<p>sokka</p>\`);
-  
-  return function template(ctx, node, key = \\"\\") {
-    return block1();
-  }
-}"
-`;
-
-exports[`slots slot and (inline) t-call 3`] = `
-"function anonymous(bdom, helpers
 ) {
   let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
   let { callSlot } = helpers;
@@ -1531,17 +1518,30 @@ exports[`slots slot and (inline) t-call 3`] = `
 }"
 `;
 
+exports[`slots slot and (inline) t-call 3`] = `
+"function anonymous(bdom, helpers
+) {
+  let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
+  
+  let block1 = createBlock(\`<p>sokka</p>\`);
+  
+  return function template(ctx, node, key = \\"\\") {
+    return block1();
+  }
+}"
+`;
+
 exports[`slots slot and t-call 1`] = `
 "function anonymous(bdom, helpers
 ) {
   let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
-  let { capture, getTemplate, markRaw } = helpers;
-  const callTemplate_1 = getTemplate(\`__template__999\`);
+  let { capture, call, markRaw } = helpers;
   
   let block1 = createBlock(\`<div><block-child-0/></div>\`);
   
   function slot1(ctx, node, key = \\"\\") {
-    return callTemplate_1.call(this, ctx, node, key + \`__1\`);
+    const template1 = (ctx['__owl__'].subTemplates.__template__1(ctx['__owl__'].app));
+    return call(this, template1, ctx, node, key + \`__1\`);
   }
   
   return function template(ctx, node, key = \\"\\") {
@@ -1556,11 +1556,13 @@ exports[`slots slot and t-call 2`] = `
 "function anonymous(bdom, helpers
 ) {
   let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
+  let { callSlot } = helpers;
   
-  let block1 = createBlock(\`<p>sokka</p>\`);
+  let block1 = createBlock(\`<span><block-child-0/></span>\`);
   
   return function template(ctx, node, key = \\"\\") {
-    return block1();
+    const b2 = callSlot(ctx, node, key, 'default', false, null);
+    return block1([], [b2]);
   }
 }"
 `;
@@ -1569,13 +1571,11 @@ exports[`slots slot and t-call 3`] = `
 "function anonymous(bdom, helpers
 ) {
   let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
-  let { callSlot } = helpers;
   
-  let block1 = createBlock(\`<span><block-child-0/></span>\`);
+  let block1 = createBlock(\`<p>sokka</p>\`);
   
   return function template(ctx, node, key = \\"\\") {
-    const b2 = callSlot(ctx, node, key, 'default', false, null);
-    return block1([], [b2]);
+    return block1();
   }
 }"
 `;
diff --git a/tests/components/__snapshots__/t_call.test.ts.snap b/tests/components/__snapshots__/t_call.test.ts.snap
index 9d94e182..57eb6999 100644
--- a/tests/components/__snapshots__/t_call.test.ts.snap
+++ b/tests/components/__snapshots__/t_call.test.ts.snap
@@ -116,13 +116,13 @@ exports[`t-call handlers are properly bound through a t-call 1`] = `
 "function anonymous(bdom, helpers
 ) {
   let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
-  let { getTemplate } = helpers;
-  const callTemplate_1 = getTemplate(\`__template__999\`);
+  let { call } = helpers;
   
   let block1 = createBlock(\`<div><block-child-0/><block-text-0/></div>\`);
   
   return function template(ctx, node, key = \\"\\") {
-    const b2 = callTemplate_1.call(this, ctx, node, key + \`__1\`);
+    const template1 = (ctx['__owl__'].subTemplates.__template__1(ctx['__owl__'].app));
+    const b2 = call(this, template1, ctx, node, key + \`__1\`);
     let txt1 = ctx['counter'];
     return block1([txt1], [b2]);
   }
@@ -147,13 +147,13 @@ exports[`t-call handlers with arguments are properly bound through a t-call 1`]
 "function anonymous(bdom, helpers
 ) {
   let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
-  let { getTemplate } = helpers;
-  const callTemplate_1 = getTemplate(\`__template__999\`);
+  let { call } = helpers;
   
   let block1 = createBlock(\`<div><block-child-0/></div>\`);
   
   return function template(ctx, node, key = \\"\\") {
-    const b2 = callTemplate_1.call(this, ctx, node, key + \`__1\`);
+    const template1 = (ctx['__owl__'].subTemplates.__template__6(ctx['__owl__'].app));
+    const b2 = call(this, template1, ctx, node, key + \`__1\`);
     return block1([], [b2]);
   }
 }"
@@ -178,13 +178,13 @@ exports[`t-call parent is set within t-call 1`] = `
 "function anonymous(bdom, helpers
 ) {
   let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
-  let { getTemplate } = helpers;
-  const callTemplate_1 = getTemplate(\`__template__999\`);
+  let { call } = helpers;
   
   let block1 = createBlock(\`<div><block-child-0/></div>\`);
   
   return function template(ctx, node, key = \\"\\") {
-    const b2 = callTemplate_1.call(this, ctx, node, key + \`__1\`);
+    const template1 = (ctx['__owl__'].subTemplates.__template__3(ctx['__owl__'].app));
+    const b2 = call(this, template1, ctx, node, key + \`__1\`);
     return block1([], [b2]);
   }
 }"
@@ -218,11 +218,11 @@ exports[`t-call parent is set within t-call with no parentNode 1`] = `
 "function anonymous(bdom, helpers
 ) {
   let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
-  let { getTemplate } = helpers;
-  const callTemplate_1 = getTemplate(\`__template__999\`);
+  let { call } = helpers;
   
   return function template(ctx, node, key = \\"\\") {
-    return callTemplate_1.call(this, ctx, node, key + \`__1\`);
+    const template1 = (ctx['__owl__'].subTemplates.__template__5(ctx['__owl__'].app));
+    return call(this, template1, ctx, node, key + \`__1\`);
   }
 }"
 `;
@@ -353,8 +353,7 @@ exports[`t-call t-call in t-foreach and children component 1`] = `
 "function anonymous(bdom, helpers
 ) {
   let { text, createBlock, list, multi, html, toggler, component, comment } = bdom;
-  let { prepareList, getTemplate, withKey } = helpers;
-  const callTemplate_1 = getTemplate(\`__template__999\`);
+  let { prepareList, call, withKey } = helpers;
   
   let block1 = createBlock(\`<div><block-child-0/></div>\`);
   
@@ -368,7 +367,8 @@ exports[`t-call t-call in t-foreach and children component 1`] = `
       ctx[\`val_index\`] = i1;
       ctx[\`val_value\`] = k_block2[i1];
       const key1 = ctx['val'];
-      c_block2[i1] = withKey(callTemplate_1.call(this, ctx, node, key + \`__1__\${key1}\`), key1);
+      const template1 = (ctx['__owl__'].subTemplates.__template__4(ctx['__owl__'].app));
+      c_block2[i1] = withKey(call(this, template1, ctx, node, key + \`__1__\${key1}\`), key1);
     }
     const b2 = list(c_block2);
     return block1([], [b2]);
diff --git a/tests/components/hooks.test.ts b/tests/components/hooks.test.ts
index 56a0ad58..0c222f16 100644
--- a/tests/components/hooks.test.ts
+++ b/tests/components/hooks.test.ts
@@ -444,6 +444,7 @@ describe("hooks", () => {
       let cleanupRun = 0;
       let steps = [];
       class MyComponent extends Component {
+        static template = xml`<div/>`;
         state = useState({
           value: 0,
         });
@@ -455,7 +456,6 @@ describe("hooks", () => {
           });
         }
       }
-      MyComponent.template = xml`<div/>`;
 
       const component = await mount(MyComponent, fixture);
 
@@ -512,6 +512,7 @@ describe("hooks", () => {
     test("dependencies prevent effects from rerunning when unchanged", async () => {
       let steps = [];
       class MyComponent extends Component {
+        static template = xml`<div/>`;
         state = useState({
           a: 0,
           b: 0,
@@ -540,7 +541,6 @@ describe("hooks", () => {
           );
         }
       }
-      MyComponent.template = xml`<div/>`;
       steps.push("before mount");
       const component = await mount(MyComponent, fixture);
       steps.push("after mount");
@@ -597,6 +597,7 @@ describe("hooks", () => {
     test("effect with empty dependency list never reruns", async () => {
       let steps = [];
       class MyComponent extends Component {
+        static template = xml`<div t-esc="state.value"/>`;
         state = useState({
           value: 0,
         });
@@ -610,7 +611,6 @@ describe("hooks", () => {
           );
         }
       }
-      MyComponent.template = xml`<div t-esc="state.value"/>`;
 
       const component = await mount(MyComponent, fixture);
 
diff --git a/tests/helpers.ts b/tests/helpers.ts
index 44574c00..f21f31bb 100644
--- a/tests/helpers.ts
+++ b/tests/helpers.ts
@@ -13,13 +13,13 @@ import {
   onWillUpdateProps,
   status,
   useComponent,
-  xml,
 } from "../src";
 import { helpers } from "../src/app/template_helpers";
 import { TemplateSet } from "../src/app/template_set";
 import { BDom } from "../src/blockdom";
 import { compile } from "../src/compiler";
-import { globalTemplates } from "../src/utils";
+import { Portal } from "../src/portal";
+// import { globalTemplates } from "../src/utils";
 
 const mount = blockDom.mount;
 
@@ -39,9 +39,6 @@ export function makeTestFixture() {
   return fixture;
 }
 
-beforeEach(() => {
-  xml.nextId = 999;
-});
 export async function nextTick(): Promise<void> {
   await new Promise((resolve) => setTimeout(resolve));
   await new Promise((resolve) => requestAnimationFrame(resolve));
@@ -117,16 +114,29 @@ export function snapshotEverything() {
     // this function has already been called
     return;
   }
-  const globalTemplateNames = new Set(Object.keys(globalTemplates));
   shouldSnapshot = true;
   beforeEach(() => {
     snapshottedTemplates.clear();
   });
 
+  const getTemplate = TemplateSet.prototype.getTemplate;
+  TemplateSet.prototype.getTemplate = function (this: any, name: string) {
+    if (name === Portal.template) {
+      this.skipSnapshot = true;
+    }
+    const result = getTemplate.call(this, name);
+    this.skipSnapshot = false;
+    return result;
+  };
+
   const originalCompileTemplate = TemplateSet.prototype._compileTemplate;
-  TemplateSet.prototype._compileTemplate = function (name: string, template: string | Element) {
+  TemplateSet.prototype._compileTemplate = function (
+    this: any,
+    name: string,
+    template: string | Element
+  ) {
     const fn = originalCompileTemplate.call(this, "", template);
-    if (!globalTemplateNames.has(name)) {
+    if (!this.skipSnapshot) {
       expect(fn.toString()).toMatchSnapshot();
     }
     return fn;