Japan’s Honda Motor will buy a 1% stake in Chinese electric vehicle (EV) battery maker Contemporary Amperex Technology (CATL) and the two will jointly develop EV batteries, the companies said on Friday.

The move comes at a time when auto manufacturers and EV battery makers are joining forces in pursuit of an electric future. CATL, based in Ningde, said last year it would develop batteries with Honda and also supply batteries to Tesla , Toyota and Volkswagen AG. Honda and CATL said in a statement they would develop battery technologies and research a battery recycling business. Honda will launch its first EV with CATL’s battery in China in 2022 and will expand the partnership with stable EV battery supply globally in the future.

Honda has struck a number of partnerships to make electric cars, including a joint venture with China’s GAC under which the Japanese automaker began selling its first all-battery EV, the Everus VE-1 SUV crossover, in China last year.

It has also tied up with Hitachi Ltd’s auto parts subsidiary to develop, produce and sell motors to be used in petrol hybrids, plug-in hybrids and battery electric cars.

For the North American market, Honda has partnered with General Motors Co to develop two new EVs. The two are also working to develop hydrogen fuel cell vehicle technology.

CATL is building a battery plant in Germany and is considering expanding to North America. It has an office in Yokohama near Tokyo. Its Shenzhen-listed shares closed at about 200 yuan ($28.54) on Friday.  Meanwhile, auto sales in China rose 11.6% in June from a year earlier to 2.3 million units, driven largely by strong demand for trucks and vans as Beijing ramps up infrastructure spending to revive the economy.

In a further sign the world’s largest auto market is recovering from coronavirus lockdowns, auto wholesales in June rose for the third straight month to 2.3 million units, according to data from the China Association of Automobile Manufacturers (CAAM), the country’s largest auto industry body.

Sales of trucks, vans and other commercial vehicles, which constitute for around a quarter of overall market, surged 63% on-year, while sales of passenger vehicles rose only 1.8%.

Reuters