Toyota Motor Corp. agreed to buy batteries from Contemporary Amperex Technology Co. Ltd. as part of a broader partnership.

The two companies have entered into a comprehensive partnership agreement for the stable supply and further development of New Energy Vehicle (NEV) batteries. The two companies have also commenced discussions that cover a wide range of fields, including: supply of batteries, new technology development, product quality improvements, and the reuse and recycling of batteries.

CATL is the world's leading supplier of drive battery systems for vehicles with advantages across the globe. In recent years, as vehicle electrification has accelerated worldwide, the company has won recognition from many automobile manufacturers both in China and overseas.

To further promote the widespread use of electrified vehicles, CATL and Toyota agree that a stable supply of batteries is critical and that battery technology must be further developed and advanced. To this end, the two companies intend to establish joint systems and engage in specific initiatives together.

Through this broad-ranging collaboration, CATL will combine its battery development and supply capabilities with Toyota's electrified vehicle and battery development technologies.

Automakers are vying for access to vast amounts of batteries to power a growing number of electric vehicles amid capacity constraints and limited access to raw materials. For example, Volkswagen AG has been taking steps to secure enough batteries amid concerns it may not get what it needs from South Korea’s Samsung SDI Co. Daimler AG is betting that half of its global sales will be electric by 2030.

Volkswagen and Daimler have announced tens of billions of dollars in battery investments.

After years of focusing on hybrid and fuel-cell technology, Toyota is embracing all-electric cars. The copany is forecasting annual sales of 5.5 million EVs globally in 2025, after moving up its prior target by five years.

Founded in 2011, CATL overtook Panasonic as the world’s largest supplier of EV batteries by sales in 2017 thanks to increasing domestic demand. It counts several Chinese carmakers as well as BMW AG and VW as customers.