General Motors Company (NYSE: GM), in a press release, has announced an agreement with Honda for new advanced chemistry battery components, including the cell and module, to facilitate both companies’ plans for all-electric vehicles. They claim that the next generation battery will be delivering higher energy density, smaller packaging, and faster charging capabilities for their future products, mainly in the North American market.

Honda will be collaborating on GM’s next generation battery, branded  EME 1.0, and will be sourcing the battery modules from GM for their future cars.

“This new, multiyear agreement with Honda further demonstrates General Motors’ capability to innovate toward a profitable electric portfolio,” said Mark Reuss, General Motors Executive Vice President of Global Product Development, Purchasing and Supply Chain. “GM’s decades of electrification experience and strategic EV investments, alongside Honda’s commitment to advancing mobility, will result in better solutions for our customers and progress on our zero emissions vision.”

Battery packs are usually the most expensive component of electric vehicles, costing between $10,000 and $12,000, amounting to nearly a third of the cost of GM’s Chevrolet Bolt electric vehicle. GM aims to nearly halve this price by 2021, sources told Reuters.  

GM and Honda have formed the industry’s first manufacturing joint venture to produce an advanced hydrogen fuel cell system within the 2020s.

“In addition to our ongoing joint development and production of fuel cells, this battery component collaboration will enable us to take a new step toward the realization of a sustainable society,” said Takashi Sekiguchi, Chief Officer for Automobile Operations and Managing Officer of Honda.