EV battery maker to go public through $1.33 bln SPAC deal

Electric vehicles battery maker will go public through a merger with blank check company RMG Acquisition Corp in a $1.33 billion deal.

The deal is expected to raise $384 million for Romeo which includes an investment of $150 million from investors such as The Heritage Group and Republic Services.

According to a statement, Romeo will use this for increasing the capacity and research and development to develop battery system technologies for commercial vehicles. The deal is expected to close in the fourth quarter of 2020 and the joint venture will be under the symbol “RMO”.

A SPAC is a shell company that raises money through an initial public offering to buy an operating entity, usually within two years.

Other EV companies with SPAC deals include Fisker, Lordstown Motors and Canoo. Electric and fuel cell vehicle startup Nikola also went public via SPAC deal earlier in 2020.

India plans $4.6 billion investment for EV battery maker

India plans to offer $4.6 billion to incentivise the companies that are looking to establish battery manufacturing facilities. The government seeks to promote the use of electric vehicles and cut down its dependence on oil.

A proposal drafted by NITI Aayog, a federal think tank chaired by Prime Minister Narendra Modi, said that India could save on oil import bills by as much as $40 billion by 2030 if electric vehicles were widely adopted.

In coming weeks the proposal will be reviewed by the PM Modi’s cabinet said a senior government official. “Currently, the battery energy storage industry is at a very nascent stage in India with investors being a little apprehensive to invest in a sunrise industry,” the proposal said.

India plans to keep its import tax rate of 5% for certain types of batteries, including batteries for electric vehicles, until 2022. It will increase to 15% later to promote local manufacturing. The annual domestic demand for battery storage and market size at present is less than 50-gigawatt hours and worth just over to $2 billion could grow to 230-gigawatt hours and more than $14 billion in ten years said the draft proposal.

The proposal estimates it would cost the companies around $6 billion over five years to set up manufacturing facilities with the support of government subsidies.

The policy is guided by ‘EV Cell’ which presented 5-year roadmap that will see 500,00 EVs on roads of the Delhi. As per the policy, the Delhi government will provide purchase incentives of Rs 30,000 to electric two-wheelers, e-rickshaws, and goods carriers. For electric cars, the purchase incentives range from Rs 10,000 to Rs 150,000.

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