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This article is written by Srishti Pareek who is pursuing a Diploma in M&A, Institutional Finance and Investment Laws (PE and VC transactions)  from Lawsikho.


In this era of Green Economy companies are rushing toward the innovation of green technology. The automobile sector is facing a drastic change in its approach due to a shift from combustion vehicles to electric vehicles, Petroleum sponsored vehicles to provide more energy and sustainability to vehicles whereas a Battery vehicle requires special care and timely recharge and is comparatively less reliable for long journeys. 

The battleground for the next generation of EV batteries has been drawn, every automaker is investing in battery technologies. The majority of them are investing in Solid-State batteries, Volkswagen and Bill gates are doing with quantum scale solid-state battery and Toyota with their solid-state batteries is planning to sell their vehicles with those batteries.

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While Tesla is going forward with its custom 4680 cells, with so much competition, BMW and Ford have decided to step their foot in the current run by betting on technology that remains elusive until today “Solid State Battery” via. Special Purpose Acquisition Companies (SPAC). 


Bayerische Motor Werke AG, generally known as BMW, is a German multinational company that produces extravagant vehicles and motorcycles. The company was founded in 1917 by a Munich Firm named as Rapp-Motorenwerke, after that, it was consolidated into Knorr-Bremse AG in the year 1920 before being re-established as BMW AG in 1922. 

It was the successors of Bayerische Flugzeugwerke AG that established the company in 1916. Thus, 1916 is subsequently viewed as BMW’s founding year. BMW is known for sheer driving pleasure and has established its name through years of growth and service. The company is now stepping into the manufacturing of Electric cars with the help of completely new tech, whose reliability is still in question.

Whereas, Ford Automobile Company, was founded in the year 1903 by Henry Ford and 11 investors. The company was re-incorporated in the year 1919 by Ford, his wife, and his son, acquiring full ownership, and were the sole stockholders of the company until January 1956. The company is an American multinational automaker having its headquarter in Dearborn, Michigan, manufactures automobiles and commercial vehicles under the brand name Ford, and luxury cars as well. 

A shift from combustion engine to electric power isn’t the only revolution happening in the automobile industry. With the increase in the demand for EV Batteries and watching an uncertain future of combustion vehicles. The introduction of more advanced technology became the need of the hour, thus, the evolution of EV batteries with more durability and performance could increase reliability on batteries and can bring a light toward a faded future. 

To bring this change a Colorado-based start-up Solid Power, an industry leader in the manufacturing of all-solid-state batteries for electric vehicles and mobile chargers. Solid Power produces and develops all-solid-state batteries, with major focus and emphasis on all solid i.e., 100% solid. Meaning thereby the batteries would solely include solid and no gel or liquid component will be included.  

What makes Solid Power distinct from other makers is the way that the organization is creating an innovation that will supplant highly flammable liquid electrolytes in conventional lithium-ion batteries which incorporates a restrictive sulfide solid electrolyte. 

Hence, making it more secure and practical for utilization, the batteries are similarly more proficient in high-temperature range and can give 50-70 per cent expansion in energy thickness than the greater part of the best accessible rechargeable battery. The batteries are expected to outperform incumbent lithium-ion batteries on both energy and cost levels. 

To be a part of the race, BMW and Ford invested in Solid Power and became the largest investors in the company and as a result, the three-company entered into a joint development agreement through which both the companies would be contributing funds for the development of the product. Volta Energy Technologies, a venture capital firm from the U.S. Department of Energy Argonne National Laboratory, focuses on investing in new generation energy storage and battery innovations. 

Volta Energy Technologies invested in the company at its early stage and as a result of this, the company is already producing multi-layer all-solid-state batteries using the industrial standard automated commercial standard manufacturing equipment.  

What is the deal

Solid Power, a Colorado-based start-up, is an industry leader in manufacturing batteries, with the main focus on developing and producing all-solid-state batteries for electric vehicles and mobile chargers. Solid Power is working on a technology that is not only high in demand but is also a risky road to go on, the company is committed to the development of lower-priced batteries both at the cell level and the pack level. 

Solid Power is working on a third-generation cell design that can eliminate the usage of costly metals like nickel, and cobalt, which could further result in a 90 per cent reduction in the cost of the cathode, which is one of the most expensive components used in the lithium-ion batteries. 

Solid Power and Ford’s relationship came into the picture in the year 2019 after releasing the statement “Solid Power is teaming up with Ford Motor Company to develop all-solid-state batteries (ASSB) for the next generation vehicle”. Thus, the two entered into a joint development agreement for the sole purpose of further developing ASSB technology for the future of the automobile sector. In the year 2018, Ford even participated in a Series A investment round closed at $20 million. 

Similarly, before Ford, BMW entered into a joint development agreement to jointly develop Solid Power’s all-solid-state batteries for its application in Vehicles and to tailor Solid Power’s technology toward automotive requirements for high-performance electric vehicles, BMW also invested in the Series A investment round along Volta Energy Technologies and some other companies as well. 

BMW, Ford, and Volta became the leading investor in Solid Power, after the closing of the Series B investment round the company raised $130 million (3rd May 2021), the Series B investment round was backed by BMW Group, Ford Motor Company, and Volta Energy Technologies. Soon after this Ford and BMW Group announced the extension of the joint development agreement with Solid Power for the procurement of all solid batteries in the future. 

As per the new agreement, Ford and BMW both will receive full-scale 100 Ah cells for automotive qualification testing and vehicle integration in 2022. Solid Power has raised a total of $186.5 million in funding over 5 rounds. BMW and Ford appointed nominee directors in Solid Power, Mr Ted Miller was appointed by Ford Motor Company whereas, Rainer Feurer was appointed by BMW Group. 

After the completion of all funding rounds, Solid Power backed by BMW, Ford, and Volta Energy Technologies decided to go public. the company would be listed in NASDAQ under the ticker symbol SLDP, through a Special Purpose Acquisition Company (SPAC) merger with Decarbonisation Plus Acquisition Corp III, the complete merger process would complete by the fourth quarter. The valuation for the merged entity is expected to be approximately $1.2 billion. 

After the closure of the deal, Solid Power is expected to raise $600 million in the form of cash which includes $165 million from private investment in private equity (PIPE). The Decarbonisation Plus SPAC is an affiliate of Riverstone Investment group. 

Legal consideration involved in the deal

The Deal regarding the combining of Solid Power with Decarbonisation Plus, backed by BMW Group, Ford Motor Company, and Volta Energy Technology, is happening through a most debatable mechanism of raising funds from Public, Special Purpose Acquisition Companies (SPAC). 

What is Special Purpose Acquisition Companies (SPAC)

Special Purpose Acquisition Companies (SPAC) have become the most favourable method for many experienced management teams to take the companies public. A SPAC generates capital through an initial public offer with the motive of acquiring an existing operating company. Thus, an operating company after merging with a public traded SPAC will become a listed company without going for an IPO. 

Special Purpose Acquisition Companies are commonly known as blank check companies in the US. The main objective of these companies is to go for an IPO, SPAC will go through a typical IPO process by filing a registration application with the U.S. Securities and Exchange Commission (“SEC”).  

The fund generated through IPO is placed into a trust account until the acquisition is made or a predetermined period elapses. If a transaction or associated legal formalities are not completed by the deadline, the money is returned to investors with allowance for bank and broker fees.

The IPO expenses, including the underwriting commission and minimal amount of working capital expenses, are borne by the investors or the management team that formed the SPAC. After the completion of IPO, the SPAC focuses on merging with an operating company and will, once the operating company is identified the negotiate for merger or purchase agreement for the acquisition of the company or asset will be initiated.

If the SPAC requires additional capital during the process of merging up with an operating company, the investor or the management team or the sponsors provide for the additional funds. The issuance of the additional funds is done in the form of debt or by the issuance of additional shares, similar to a Private Investment in Public Equity (PIPE). 

Following the announcement of the signing of the merger deal, The SPAC will require shareholder’s approval for a merger and will prepare and file a proxy statement or a joint registration and proxy statement on Form S-4 if it intends to register new securities as part of the merger). 

This document will contain various matters relating to the approval by shareholders, a description of the proposed deal (merger), and a governance matter. It will also include the financial statement of the target company (chosen operating company), previous year financial, pro forma financial statement showing the impact of the merger.  

After the approval of shareholders for the SPAC merger as well as after the completion of all regulatory requirements, the merger will close and the target company will become a public company and will also be listed on the stock exchange. 



IPO PHASE (8+ weeks)



(Max of 3-5 months) 

Engagement of counsel

Regular periodic SEC filling

Announcement of the acquisition agreement 

Incorporate SPAC and sell founder share

Identification of target operating company

Meeting with the SPAC investor or management team to discuss the transaction 

Preparation of form S-1

Conduct due diligence and negotiate acquisition agreement 

Obtain shareholder’s approval ad completion of regulatory requirement

Filling of Form S-1 and amends responsive to SEC comments (6+ weeks)

Potentially arrange committed PIPE 

Redemption of public share of electing shareholder

Preparation for Road Show, pricing, and closing

Prepare for the signing of acquisition deal after preparing proxy documents

Closing of transaction and filling of Form Super 8-K

How SPACs are Different from Private Equity Investment

A SPAC can be used by seasoned executives, holding companies, or other investors to raise funds to invest in a respective industry. Similar to a private equity fund, there is no specific investment goal or target, rather a focus on a specific sector with a clear timeline for how long a management team has to make an acquisition. 

Once the funds are used to make a purchase, the investor becomes the owner of the business and looks to the management team to leverage their expertise to increase the business value and thus increase the share price of the investor. 

Some basic points of difference between PE investment and SPACS –

  • The SPAC investment is concentrated in one company (not diversified), at least 80% of the funds raised through the IPO needs to be used to complete the transaction in order for the transaction to be considered “qualifying”. 
    So, whereas, when funds are put in private equity funds they can be invested in various investments and can allocate the risk of some of its capital across all of these investments but with the SPAC they need to engage at least 80% of the funds raised in order to complete a transaction which would be considered qualifying in order to covert that SPAC from a holding company or a blank check company to a company that acquired the business.
  • Capital raised never leaves the public space, once the transaction is completed, investors receive the shares in the acquired company and the units of the SPAC are delisted. This differs from Private Equity because in private equity the investor remain invested in the company for a longer time frame i.e., 10-15 years and in SPAC the investors are in the public market and can exit any time by selling their shares and in that way, the investor gets their money back or in other words, get their stake reimbursed. 

Relation with the deal 

BMW, Ford, and Volta Energy Technologies are the leading investor of Solid Power, thus, to make the company public and raise a huge amount of funds a SPAC was created “Decarbonisation Plus Acquisition Corp III”, the company will raise funds and then the raised money will be transferred into trust account till the time it is merged with Solid Power. Solid Power through this process will become a public company listed in a stock exchange and is expected to raise $600 billion in the form of cash. 


BMW and Ford one of the biggest automobile giants are entering into the era of EV Batteries, global sales of internal combustion engines are predicted to drop by over 50% by 2035, a hot new market for Electric Vehicles, so to capture this market BMW and Ford are investing on a new technology which is costlier than normal lithium-ion batteries but is expected to change the world vision from lithium-ion batteries to all-solid-state batteries.

Both the automobile companies are investing in a start-up Solid Power, a leader in the manufacturing of batteries. BMW and Ford are backing Solid Power to raise funds for the future production of battery cells, through Special Purpose Acquisition Companies (SPAC). SPAC’s are not a new concept but are suddenly catching the eyes of investors, considering the risk factor of SPAC it is still a lucrative option for the investors to raise funds. 


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