South Korea’s top secondary battery maker LG Chem Ltd. has won a multi-billion-dollar deal to supply lithium-ion batteries to Volvo Cars, a Swedish luxury car brand that has vowed to go all electric starting this year, along with Chinese peer CATL.

LG Chem said on Wednesday that it signed a long-term deal with Volvo Cars to supply lithium-ion batteries for the Swedish car maker’s next-generation electric vehicles. Chinese battery maker CATL is the other battery maker that jointly signed the multi-billion-dollar battery supply deal with Volvo Cars, Volvo Car Group said in a press release on Wednesday (local time). The related parties did not disclose term details such as the exact deal amount under the agreement, but Volvo Car Group said the deal is worth multi-billion dollars in the press release.

“With today’s agreement we effectively secured out battery supply for the upcoming decade,” Martina Buchhauser, senior vice president for procurement at Volvo Cars, said in the press release, hinting that the two battery makers would supply batteries for at least 10 years. “By having two suppliers available in each region, we also ensure that we have flexibility in our supply chain going forward.”

Under the contract, LG Chem and CATL will supply batteries for next-generation electric models of Volvo and its high-performance electric car brand Polestar launched in 2017, all designed based on a modular platform.

A modular platform is a car frame that can be shared among various car models with differently designed bodies, allowing manufacturers to save on costs and reduce overall product development period. Manufacturing different car models using a shared platform has become a key strategy by multiple carmakers.

Volvo Cars targets to introduce Scalable Product Architecture 2, a modular platform for its next-generation mid- to large-size electric vehicles, in early 2020. The automaker also has Compact Modular Architecture as another platform for compact cars.

Volvo Cars in 2017 announced that every new car launched from 2019 would have an electric motor, and that by 2025, 50 percent of its total car sales would be from pure electric vehicles. The Swedish luxury car company founded in 1927 has been under control of Chinese owner Geely Holding Group, a Chinese investment firm, since 2010.

LG Chem successfully developed the industry’s first pouch-type battery based on Long Cell technology. Long Cell technology maximizes internal space usage of the battery pack, improving energy density, which increases the driving range of an electric vehicle and simplifies pack structure. Volvo Cars is also said to have chosen LG Chem as its battery supply because of the Long Cell technology.

LG Chem is also the only secondary battery manufacturer with electric battery production bases in three regions – the United States, China, and Europe. About 2.1 million electric vehicles have been loaded with LG Chem batteries over the last decade. The company has been supplying batteries to 13 of top 20 major global finished car brands including Mercedes-Benz, Volkswagen, Ford, Volvo, General Motors, Renault, and Hyundai Motor.

By Kang Doo-soon and Lee Eun-joo

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