Colorado-based Solid Power will license the cell design and manufacturing processes to BMW, which will pay the company US$20 million through June 2024, subject to specific conditions.
As part of the agreement, Solid Power will retain the intellectual property rights related to its electrolyte material, which it will supply to BMW once the carmaker's battery production lines are up and running.
BMW, an investor in Solid Power, already has an agreement to receive finished battery cells.
Solid Power, which went public in December last year, is among a group of companies trying to create next-generation batteries for electric vehicles, aiming to solve some issues related to lithium-ion batteries that are currently is use.
Solid-state batteries use a solid electrolyte, compared with a liquid one in lithium-ion batteries, and have a lower risk of catching fire.