Volkswagen reportedly has secured production of solid state batteries developed with US startup QuantumScape, opens new tab, both companies have said.

Under an agreement, VW battery unit PowerCo would receive the licence to mass-produce battery cells based on QuantumScape technology, pending technological progress and certain royalty payments, Reuters reported.

The deal replaced an earlier joint venture between the two companies, Volkswagen told the news agency.

VW owns 17% in QuantumScape currently worth $459 million.

Under the agreement, PowerCo can manufacture up to 40 gigawatt-hours (GWh) per year using the QuantumScape technology, with an option to expand to 80 GWh, which is enough to equip approximately 1m vehicles annually, the two companies said.

"QuantumScape's technology is poised to enter a pivotal stage where PowerCo's specialised expertise, resources and global factories can help facilitate the transition to industrial-scale production," PowerCo CEO Frank Blome told Reuters.

The companies would target a product which would be scaled up for integration into a VW group vehicle series.

The agreement superseded a joint venture between the two companies to co-manufacture batteries dating from 2018.