Volkswagen AG is planning to supply electric vehicle components and battery cells to Mahindra & Mahindra Ltd. as the German manufacturer tries to make inroads into India’s emerging clean transportation market.

Mahindra will equip some of its five planned electric sport utility vehicles — due to launch in December — with components from Volkswagen’s MEB platform and unified cells, the Mumbai-based carmaker said in an exchange filing February 16.

The supply pact, signed in 2022, will run over several years and will have a total volume of about 50 gigawatt hours over its lifetime, Mahindra said. The companies will continue to explore further opportunities for collaboration and strengthen their presence in India’s electric mobility sector, according to the filing.

Global carmakers are taking an increased interest in India’s budding EV market as demand for battery-powered transport slows in Europe and the U.S. after a few years of surging growth. BMW sees electric vehicles accounting for 25% of its sales in India by 2025, up from 10% in 2023. Elon Musk has said Tesla Inc. will likely make a “significant investment” in India.

Read more: Volkswagen Cuts Its EV Output Levels in Germany

For Volkswagen, EVs will be the “main focus” in India in 2024, Ashish Gupta, brand director at the company’s passenger cars division in the South Asian nation, said earlier this month. The carmaker will initially bring fully built electrified units into India, and later assemble more premium EVs. It will make EVs locally only after the inflection point is reached, around 2026, he said.

While India’s EV market is growing, its size is small. Price-conscious consumers are reluctant to buy costly battery-powered cars without subsidies, especially considering the limited availability of charging stations. Electric cars made up just 2.3% of the total passenger vehicles sold last year, according to BloombergNEF.

Volkswagen last month sold 8,265 cars in India, down 11% from a year earlier, according to the Society of Indian Automobile Manufacturers.