(Yicai) Nov. 12 -- Senior Technology Material, a leading Chinese producer of lithium-ion battery separators, has announced a deal to supply Volkswagen Group over the next few years.

Senior Material Europe, a wholly owned subsidiary, signed the agreement with Volkswagen’s battery subsidiary yesterday, its Shenzhen-headquartered parent company said on the same day.

Senior Tech, which has a number of production plants in China and one in Sweden, will supply about 2.09 billion square meters of separators between next year and 2032. No further details were announced.

Separators are key components in lithium-ion batteries. Crucial in ensuring their safety and performance, separators are in high demand for electric vehicles and other energy storage applications.

The Volkswagen deal is the latest in a recent series of major overseas contracts for Senior Tech, whose clients include Contemporary Amperex Technology, Northvolt, LG Energy Solution, and Samsung SDI.

Shares of Senior Tech [SHE: 300568] jumped by their 10 percent daily trading limit in Shanghai this morning, before sliding back to end 0.3 percent up at CNY11.99 (USD1.66) each. The benchmark ChiNext Index closed little changed.

PowerCo, Volkswagen’s battery subsidiary, was launched in 2022, and its main business includes investing in and constructing large-scale gigafactories in Europe, developing and producing power batteries for Volkswagen, and processing battery raw materials, according to the announcement.

Senior Tech made almost 2.59 billion sqm of lithium-ion battery separators last year, a year-on-year increase of 50 percent‌, with overseas markets accounting for nearly 16 percent of the firm’s annual revenue, according to its annual financial statement.

Editor: Tom Litting