Chinese battery giant CATL has signed a seven-year deal with Honda Motor (China) Investment to supply electric vehicle batteries to the Chinese unit of the Japanese carmaking giant, reported Yicai Global on December 9.

Honda China will purchase 123 gigawatt-hours of power batteries from CATL between 2024 and 2030, the pair said in a joint statement on December 8. The two companies have agreed on a basic purchase price and a price adjustment mechanism, the southeast China’s Ningde-based battery maker noted in a separate announcement, according to Yicai Global.

CATL and Honda China have been in a comprehensive strategic cooperation agreement on the development, supply, recycling, and reuse of new energy vehicle power batteries since 2020.

Honda China did not specify on how many vehicles and models it will equip the batteries from CATL, an insider at the company told Yicai Global. But considering that the e:NP1, an EV model produced by Honda’s joint venture in China GAC Honda Automobile, uses 53.6-kilowatt-hour or 68.8-KWh batteries, the batteries supplied by CATL could be equipped on two million cars of this particular model, based on an average of 61.2 KWh.

Honda has two JVs in China, China Dongfeng Honda Automobile(东风本田) and GAC Honda(广汽本田). To achieve Honda China’s goal to sell 800,000 EVs per year by 2030, both companies announced plans to build a new plant, scheduled to go into production in 2024, with an annual capacity of 120,000 units each.

Honda, which did not sell as many EVs as other carmakers, recently started to push for a transition to electric, as China’s NEV market is rapidly rising. Honda China will unveil 10 Honda-branded battery EV models within the next five years and stop releasing fuel-powered cars after 2030, according to the firm’s new EV development strategy released in October last year, Yicai Global said.