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Key Takeaways
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Lithium Americas and General Motors have formed a joint venture to extract lithium from the Thacker Pass site in Nevada.
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GM will provide $625 million in cash and credit and own a 38% stake in the project.
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GM said improving the domestic supply chain for lithium and other materials needed for electric vehicle batteries will help the company control costs.
Shares of Lithium Americas (LAC) skyrocketed on Wednesday after the mining company announced the formation of a joint venture with General Motors (GM) to extract lithium, the element used in electric vehicle (EV) batteries, from a major mine in Nevada.
Lithium Americas said GM would invest $625 million and acquire a 38% stake in the Thacker Pass site. It added that $430 million of the money would be in a direct cash payment to support the construction of Phase 1 of the Thacker Pass lithium mine site, while the remainder would come in the form of credit that can be used as collateral to support reserve account requirements. a $2.3 billion conditional loan from the Department of Energy to develop Thacker Pass, announced in March.
Lithium Americas would initially invest $211 million in the project and own the remaining 62% of the project
GM’s goal to build a ‘resilient’ EV supply chain
The company added that this new deal with GM “replaces GM’s $330 million Tranche 2 common equity investment commitment under its original investment agreement” entered into in January 2023.
Jeff Morrison, Chief Procurement and Supply Chain Officer at GM, noted that the automaker is “pleased with the significant progress Lithium Americas is making to help GM achieve our goal of developing a resilient EV materials supply chain,” and that obtaining critical raw materials, such as lithium, for electric vehicles from domestic suppliers will “help us control battery cell costs, deliver value to our customers and investors, and create jobs.”
Even with Wednesday’s 26% jump, shares of Lithium Americas are down more than a third this year. GM shares rose about 2% on Wednesday and have added nearly 37% of their value this year.
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