Lithium Americas Corp. and General Motors Holdings LLC announced a joint venture for a lithium carbonate mining operation called Thacker Pass in Humboldt County, Nevada. This marks the largest publicly announced investment by a U.S. original equipment manufacturer in a lithium carbonate project.
“Today’s joint venture announcement is a win-win for GM and Lithium Americas,” said Jonathan Evans, President and CEO of Lithium, in a press release. “Our relationship with GM has been significantly strengthened as we pursue our mutual goal of developing a robust domestic lithium supply chain by advancing the Thacker Pass project.”
Securing lithium raw materials from a government entity is a key advantage for General Motors as it aims to boost profits across its all-electric vehicle business. This partnership also aligns with federal requirements to increase the production and sale of electric vehicles.
The collaboration enables both companies to access necessary materials and technical support, benefiting their operations on this large-scale project. Under the agreement, Lithium will hold a 62% interest in Thacker Pass, while General Motors will acquire the remaining 38% ownership stake for $625 million in cash and letters of credit.
This includes $430 million for phase one construction and a $195 million letter of credit facility, which will back reserve requirements under a conditional $2.3 billion loan from the U.S. Department of Energy that Lithium received in March.
The partnership replaces General Motors’ previously announced $330 million equity investment commitment from January 2023. Following the announcement, Lithium’s shares rose 23%, closing at $3.29 with a market cap of $532.9 million. In contrast, General Motors’ shares increased by 2.4%, closing at $49.01.
Evans stated that Lithium will work closely with General Motors until the final investment decision at the end of the year. GM’s joint venture investment will support the project process and facilitate the DOE loan closure.
“We’re pleased with the significant progress Lithium Americas is making to help GM develop a resilient EV material supply chain,” said Jeff Morrison, SVP of Global Purchasing and Supply Chain, in the press release. “Sourcing critical EV raw materials, like lithium, from U.S. suppliers is expected to help us manage battery cell costs, deliver value to our customers and investors, and create jobs.”