(Reuters) -The Volkswagen Group's China subsidiary and CATL, the world's largest battery maker, plan to collaborate on developing lithium batteries for Volkswagen's electrified cars in China, CATL said on Monday.

The parties signed a statement of intent with the aim of creating bespoke batteries with higher performance and more efficient cost structures for specific models in the Chinese market, a Volkswagen spokesperson said.

The partnership will later extend to other areas for electrified vehicles like battery recycling and vehicle-to-grid technology, where electricity from the car is transferred back into the electricity grid, CATL said.