General Motors Co. (GM) announced Wednesday a strategic investment of $625 million into a joint venture with Lithium Americas Corp., a Canadian mining company, to develop a lithium mining operation at Thacker Pass, Nevada. This investment represents a critical step in GM's effort to secure a reliable, domestic supply of lithium-a key component for electric vehicle (EV) batteries-as the automaker accelerates its shift toward an all-electric fleet. The deal, which involves a combination of cash and credit facilities, will give GM a 38% interest in Thacker Pass, according to company statements. Lithium Americas shares surged over 10% in early trading following the announcement, climbing to approximately $3 per share. Earlier in premarket trading, shares had jumped 20%.
The partnership is aimed at reducing GM's reliance on overseas battery materials, particularly from China, and aligning with federal requirements to source critical EV materials domestically. "We're pleased with the significant progress Lithium Americas is making to help GM achieve our goal to develop a resilient EV material supply chain," said Jeff Morrison, GM's senior vice president of global purchasing and supply chain.
The automaker plans to contribute $430 million in direct cash for the construction of the first phase of the Thacker Pass project. Additionally, a $195 million letter of credit facility is part of the agreement, complementing the cash investment. This new arrangement replaces a previously delayed $330 million investment agreement from August. The lithium mined from Thacker Pass is expected to play a significant role in GM's plan to scale up EV production, reduce costs, and create jobs. GM's focus on developing a domestic supply chain for lithium is crucial to meeting increasing federal regulations and incentives designed to promote the manufacturing and sale of electric vehicles in the United States.
The U.S. Department of Energy (DOE) has expressed its support for the project, planning to lend Lithium Americas up to $2.3 billion to support the development of the site. Lithium Americas noted that the DOE loan is expected to be finalized in the coming weeks, with the company aiming for a final investment decision by the year's end. The Thacker Pass project, located in Humboldt County near the Nevada-Oregon border, holds enough lithium reserves to supply materials for batteries powering up to one million EVs annually. Initial construction began in March 2023 after the mining company successfully resolved a protracted legal battle involving conservationists, ranchers, and Indigenous groups opposing the project.
Upon closing the transaction, GM and Lithium Americas will also enter into a 20-year offtake agreement that allows GM to secure up to 38% of the lithium production from the project's second phase, further solidifying its access to a domestic lithium supply for the long term.
In addition to the Thacker Pass project, GM announced a $10 million investment into Forge Nano, a material science firm specializing in battery material coatings. GM intends to leverage Forge Nano's technology to enhance the performance and longevity of EV cells used in its vehicles. Jonathan Evans, CEO of Lithium Americas, emphasized the strengthened relationship with GM. "Our relationship with GM has been significantly strengthened with this joint venture as we continue to pursue a mutual goal to develop a robust domestic lithium supply chain by advancing the development of Thacker Pass," Evans said.
GM's initial involvement with Lithium Americas began in February 2023, when it invested $320 million and acquired around 15 million shares of the company. This latest partnership marks an evolution of their relationship and a commitment to establishing a sustainable and resilient supply of EV battery materials in the U.S.
