Example using a Tree widget to show how components are used with x-templates. REF: https://jsfiddle.net/pnqzspoe/1362/

app.html

<!-- item template -->
<script type="text/x-template" id="item-template">
  <li>
    <div
      :class="{bold: isFolder}"
      @click="toggle"
      @dblclick="changeType">
      {{ model.name }}
      <span v-if="isFolder">[{{ open ? '-' : '+' }}]</span>
    </div>
    <ul v-show="open" v-if="isFolder">
      <item
        class="item"
        v-for="(model, index) in model.children"
        :key="index"
        :model="model">
      </item>
      <li class="add" @click="addChild">+</li>
    </ul>
  </li>
</script>

<p>(You can double click on an item to turn it into a folder.)</p>

<!-- the demo root element -->
<ul id="demo">
  <item
    class="item"
    :model="treeData">
  </item>
</ul>

app.js

// demo data
var data = {
  name: 'My Tree',
  children: [
    { name: 'hello' },
    { name: 'wat' },
    {
      name: 'child folder',
      children: [
        {
          name: 'child folder',
          children: [
            { name: 'hello' },
            { name: 'wat' }
          ]
        },
        { name: 'hello' },
        { name: 'wat' },
        {
          name: 'child folder',
          children: [
            { name: 'hello' },
            { name: 'wat' }
          ]
        }
      ]
    }
  ]
}

// define the item component
Vue.component('item', {
  template: '#item-template',
  props: {
    model: Object
  },
  data: function () {
    return {
      open: false
    }
  },
  computed: {
    isFolder: function () {
      return this.model.children &&
        this.model.children.length
    }
  },
  methods: {
    toggle: function () {
      if (this.isFolder) {
        this.open = !this.open
      }
    },
    changeType: function () {
      if (!this.isFolder) {
        Vue.set(this.model, 'children', [])
        this.addChild()
        this.open = true
      }
    },
    addChild: function () {
      this.model.children.push({
        name: 'new stuff'
      })
    }
  }
})

// boot up the demo
var demo = new Vue({
  el: '#demo',
  data: {
    treeData: data
  }
})