Honda and General Motors, two giants in the automotive industry, are joining forces to build affordable electric vehicles (EVs).

The automakers said the new deal is for “affordable” EVs, including compact crossover vehicles, built using GM’s Ultium battery technology.

Although GM declined to say how much they are investing as part of the new collaboration, GM Chief Executive Mary Barra said it is part of GM’s plan to surpass Tesla in EV sales.

“We have a very important goal… that by mid-decade, by 2025, we’ll sell more EVs in the U.S. than anyone else and to do that, you need to have a portfolio of vehicles,” Barra said.

More importantly, the deal is part of GM’s push to achieve carbon neutrality in its global products and operations by 2040 and eliminate tailpipe emissions from light-duty vehicles in the United States by 2035. On the other hand, Honda has said it aims to reach carbon neutrality on a global basis by 2050.

GM is already working on technologies like lithium-metal, silicon, and solid-state batteries, along with production methods that can quickly be used to improve and update battery cell manufacturing processes. 

Meanwhile, Honda is currently developing an all-solid-state battery technology which the company sees as the core element of future EVs.

Honda and General Motors have developed a close working relationship for many years now, partnering in several projects focused on electric and autonomous vehicle technologies.