(Yicai Global) July 14 -- Shares of Gotion High-tech surged after the Chinese lithium battery maker said it will help Volkswagen Group, which is in the process of becoming the former's largest shareholder, construct a battery cell production line in Germany.

Gotion High-tech's stock price [SHE: 002074] rose as much as 8.7 percent to CNY57.58 (USD8.90) intraday, a historic high.

The new energy vehicle battery manufacturer will act as Volkswagen's technology partner to construct a cell production base in the European country, the Hefei-based company said in a statement yesterday, after penning a memorandum of understanding with the Wolfsburg-headquartered firm on July 12.

In May 2020, the pair inked an agreement for Volkswagen to buy a 26 percent stake in the Chinese company for about EUR1.1 billion (USD1.3 billion). If the transfer is completed, it would make the German firm the first global automaker to invest directly in a Chinese battery supplier.

The latest agreement should help Gotion expand globally and significantly improve its competitiveness, said the firm. Volkswagen may choose Gotion as its cell supplier if certain conditions are met while the pair will cooperate on research and development of various advanced technologies, it added.

Editor: Emmi Laine, Xiao Yi