SHANGHAI (Reuters) – Taiwanese battery maker ProLogium Technology Co said on Thursday it had signed a cooperation agreement with Daimler AG’s Mercedes-Benz to build test vehicles equipped with solid-state batteries co-developed in the years to to come.

ProLogium said in a statement it would receive a “double-digit” investment of €1 million from the German luxury carmaker, which will also sit on ProLogium’s board.

The battery maker said it would use the investment for the development of battery technology and to help establish production capacity in Europe.

The partners also agreed to milestones involving the use of solid-state battery technology in a range of passenger vehicles in the second half of the decade, ProLogium said, without giving further details.

“The solid-state technology helps reduce battery size and weight,” Markus Shafer, the German automaker’s chief technology officer, said in the statement. “That’s why we partner with companies like ProLogium.”

Solid-state batteries use thin layers of solid electrolytes, which carry lithium ions between the electrodes. They’re seen as a potential game-changer for electric vehicles (EVs) because they can store more energy, recharge faster, and offer greater safety than lithium-ion batteries that rely on liquid electrolytes.

ProLogium has become the latest battery maker to partner with Mercedes-Benz, as the German automaker strives to make all of its vehicles fully electric by 2030 and catch up with electric vehicle leader Tesla Inc. Among the Other Mercedes-Benz battery partners include Factorial Energy, Automotive Cells Co and Farasis Energy.

The latest tie-up comes as companies in the electric vehicle sector compete to develop next-generation batteries to cut costs and reduce “range anxiety”.

Chinese electric vehicle maker NIO Inc announced last January that it would deliver its ET7 sedan equipped with a 150-kilowatt-hour battery with solid-state cells starting in the fourth quarter of 2022.

ProLogium said it aims to accelerate development of a new plant by the end of 2022 to move to mass production of its solid-state battery.

In October, the battery maker raised $326 million in its latest funding round from investors including Primavera Capital Group and SoftBank China Venture Capital.

(Reporting by Zhang Yan and Brenda Goh; Editing by Christopher Cushing)

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