Chinese battery-maker Guoxuan High-tech Co.Ltd. confirmed that it is in talks with German carmaker Volkswagen AG for potential strategic cooperation in technology, product and capital.

The parties have not yet reached a binding agreement regarding the specific terms of the partnership, the company said in a statement.

The company was responding to a Reuters report that Volkswagen is close to acquiring a 20% stake in the battery-maker in a bid to expand its electrification efforts in China.

Shares of Guoxuan jumped more than 20% over two trading days in Shenzhen following the Jan. 17 media report on the discussions, triggering a Shenzhen Stock Exchange abnormal fluctuation inquiry.