QuantumScape(QS.US) soared 33%! Volkswagen announced an increase in production of the jointly developed battery.

Volkswagen announced it would significantly increase production of a solid-state battery developed with QuantumScape (QS.US) on Thursday, sending QS stock up more than 33% in pre-market trading. Under the new agreement, Volkswagen’s PowerCo subsidiary will be licensed to produce large volumes of batteries based on QuantumScape technology, pending technology advancements and a reasonable royalty for the license. The deal is seen as a key step in QuantumScape’s long-term global expansion strategy to bring its solid-state lithium battery technology to market.

Under the non-exclusive licensing agreement, PowerCo would be able to produce up to 4 gigawatt-hours of energy per year using QuantumScape’s technology, and could choose to produce up to 8 gigawatt-hours per year, enough to power about 100,000 cars annually. The companies believe the high-touch technology represents the fastest path to gigawatt-scale production of solid-state batteries to meet the growing global demand for better electric vehicle batteries.

“Electric vehicles are the future of mobility, and this agreement with QuantumScape will ensure that Volkswagen’s global fleet will have access to this groundbreaking battery technology in the coming years,” said Thomas Schmall, member of the board of directors of Volkswagen Group’s Technical Board.

QS stock was up 33.64% to $7.22 in pre-market trading on Thursday, from a 52-week range of $4.67 to $13.86; the stock’s short interest was 16.0% of total float.