The Volvo Car Group has signed long-term, "multi-billion dollar" deals with two major battery makers in Asia. In an announcement Wednesday, the car firm said that the agreements with firms CATL and LG Chem would ensure a supply of lithium ion batteries for its next generation Volvo and Polestar models.
The deals chime with Volvo Cars' wider strategy to electrify its vehicles. In 2017 the firm committed to ensuring all new Volvo cars launched from 2019 would be electrified. In addition, it wants fully electric cars to account for half of its global sales volume by 2025.
"The future of Volvo Cars is electric and we are firmly committed to moving beyond the internal combustion engine," Hakan Samuelsson, the president and CEO of Volvo Cars, said in a statement Wednesday.
"Today's agreements with CATL and LG Chem demonstrate how we will reach our ambitious electrification target," he added.
CATL and LG Chem are Chinese and South Korean businesses respectively. A major player in the automotive sector, Volvo Cars was bought by China's Zhejiang Geely Holding in 2010. The business sold 642,253 cars last year.
Speaking to CNBC's Squawk Box Europe on Wednesday, Samuelsson emphasized the importance of infrastructure being in place to support its commitment to electric mobility.
"That is really going to decide the pace we have in the transition," he said, going on to add that the "supply of batteries will be crucial."
Overall, 408,000 plug-in vehicle units were sold across Europe in 2018, according to analysis from EV-Volumes.
In 2017, there were more than 3 million electric and plug-in hybrid cars on the planet's roads, according to the International Energy Agency's (IEA) Global Electric Vehicles Outlook. This represents an increase of 54 percent compared to 2016.
Almost 580,000 electric cars were sold in China in 2017, according to the IEA, while around 280,000 were sold in the U.S.