Under the agreement signed Wednesday, CATL will supply lithium-ion batteries for next-generation Volvos and its sub-brand Polestar models over the coming decade.
CATL's battery modules will be used on Volvo's upcoming SPA2 and its existing CMA modular vehicle platforms worldwide.
Volvo, owned by China's Geely, is launching EV models under Volvo and Polestar as it takes on global peers in the increasingly competitive market.
In 2017, Volvo Cars announced that all the models it introduces starting in 2019 will be either hybrids or powered solely by batteries, becoming the first mainstream automaker to forsake the internal combustion engine. The cooperation with CATL is a major step towards its electrification ambitions.
The deal with Volvo is also the Chinese battery giant's latest effort to expand its global footprint.
Founded in 2011, CATL has inked supply contracts with a slew of global car manufacturers including BMW, Volkswagen, Daimler and Honda.
Headquartered in the city of Ningde in southeast China's Fujian Province, CATL is the world's largest maker of lithium-ion batteries with an annual sales volume of 21.31 GWh in 2018.