How to perform string operation in bat file

The solution barneyman gave is spot on, here is a direct code solution but with the variable without the quotations...

@echo off
SET var=c:\test\test1\test.exe
@echo %var:~0,-4%
pause

Basically what it does is
1) Switch of the echo
2) Creates the variable string
3) echo the variable string from position 0 to the back character -4 places...so it removes the .exe extension
4) pause to witness the result

Use ~p to expand to path only:

echo %~ps