Lithium Americas Corp. (LAC) shares are on a roll, skyrocketing over 19% after the company unveiled a game-changing investment deal with General Motors (GM). The two automotive giants are joining forces to establish a joint venture (JV) for the development and operation of the Thacker Pass lithium project, a key site in Nevada for securing the future of electric vehicle (EV) production.
This partnership isn’t just about money; it’s about strategic positioning in the global race for EV dominance. GM is putting its money where its mouth is, injecting a hefty $625 million in cash and letters of credit into Thacker Pass. This investment comes on top of a conditional $2.3 billion loan commitment from the U.S. Department of Energy (DOE) announced earlier this year.
In a major move, General Motors will acquire a 38% ownership stake in Thacker Pass, with a total investment of $625 million. This includes $430 million in direct cash to fuel Phase 1 construction and a $195 million letter of credit facility for collateral in reserve accounts under the DOE loan. This marks the largest publicly announced investment by a U.S. original equipment manufacturer (OEM) in a lithium carbonate project, highlighting the strategic importance of Thacker Pass in creating a domestic supply chain for critical minerals.
This new JV agreement supersedes the prior $330 million Tranche 2 equity investment from General Motors announced in January 2023. This latest deal adds to GM’s February 2023 Tranche 1 investment of $320 million, which gave GM around 15 million Lithium Americas shares.
As part of this strategic alliance, GM has extended its offtake agreement for up to 100% of Phase 1 production from Thacker Pass for 20 years, aligning with the DOE loan. After the JV closes, GM will enter into a new 20-year offtake agreement for up to 38% of Phase 2 production and maintain its right of first offer on the remaining Phase 2 volumes.
Lithium Americas is working diligently with the DOE and expects to finalize the DOE loan in the coming weeks. Both companies are aiming to make the final investment decision (FID) and issue full notice to proceed for Thacker Pass by the end of the year, following the completion of the DOE loan and JV transaction.
Investors looking to tap into this burgeoning market can gain exposure to Lithium Americas through the Sprott Lithium Miners ETF (LITP).
The stock market is reacting positively to this major development, with LAC shares trading up a substantial 19.2% at $3.18 at last check on Wednesday. This partnership between Lithium Americas and General Motors is a clear signal that the race for battery metals is heating up, and Thacker Pass is poised to play a pivotal role in securing a future powered by clean energy.
