(Reuters) – Umicore will establish a venture in battery materials to supply Volkswagen’s (DE:). This is as Volkswagen expands its electric car production, according to the Belgian chemicals-recycling company.

Umicore explained that this venture is designed to help Europe build its capacity for producing precursors and cathode metals, in order to meet the European Green Deal goals to create a sustainable, long-term battery supply chain.

It claimed that the Volkswagen venture was unique in Europe’s automobile market.

Thomas Schmall (chief executive at Volkswagen Group Components) stated in a statement that “teaming up with Umicore allows us to establish state-of the-art supply chains in Europe.”

The production will begin in 2025, with an initial annual production of 20GWh for Volkswagen’s Salzgitter plant in Germany. This amount will grow to 160GWh at the end of the decade.

Both parties plan to expand the reach of their partnership at a later stage.