General Motors Invests $625M in Lithium Americas to Boost Nevada’s Thacker Pass Lithium Project
Good news for the electric vehicle (EV) industry- General Motors (GM) and Lithium Americas have inked a $625 million joint venture to develop the Thacker Pass lithium project in Nevada. This partnership is another power play to boost the U.S. domestic supply chain for EV batteries and reduce reliance on lithium imports, particularly from China.
The Background: Lithium Americas Secured $2.3B DOE Loan to Drive Thacker Pass Development
In March 2024, Lithium Americas secured a $2.3 billion loan from the U.S. DOE through its Advanced Technology Vehicles Manufacturing (ATVM) Loan Program. This funding will support the development of the Thacker Pass lithium project in Nevada.
However, before Lithium Americas can access the loan, they must contribute $195 million, which will be used to cover expenses for construction and ramping up production. Additionally, General Motors (GM) will also provide a line of credit to help fund these requirements.
General Motor’s Key Investment in 2023
Back in January 2023, General Motors made a substantial investment in Lithium Americas, agreeing to provide $650 million. This was divided into two parts: the first $320 million was delivered immediately and used to advance the first phase of Thacker Pass.
But the second part of the investment, or Tranche 2, encountered some changes. Both companies decided to revise the terms due to a company reorganization. Tranche 2 was supposed to be completed by the end of 2023.
On August 30, 2024, Lithium Americas and GM extended the deadline for Tranche 2 of their investment agreement to explore better options for GM’s additional investment. They ended the original agreement when they signed a new joint venture deal. This new deal was announced on October 16.
Unlocking the Latest JV
The latest press release mentions that General Motors has agreed to invest $625 million in cash and letters of credit for a 38% stake in the Thacker Pass project. Lithium Americas, which will manage the project, retains a 62% interest and will contribute $387 million to the joint venture. The funds will be used to develop the first stage of the project, which might cost around $2.9 billion.
Jonathan Evans, President and CEO of Lithium Americas
“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. Today’s joint venture announcement is a win-win for GM and Lithium Americas. GM’s JV Investment demonstrates their continued support and helps us to unlock the previously announced $2.3 billion DOE Loan. We will be working closely with GM to advance towards the final investment decision, which we are targeting by the end of the year.”
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Domestic Lithium Supply to Support GM’s EV Ambitions
One of the highlights of the joint venture is GM’s expanded offtake agreement. It extends for up to 100% of lithium production from Thacker Pass’ first stage for 20 years. This agreement will help GM ensure a steady supply of lithium for its future EV batteries.
GM also secured the right to acquire up to 38% of production from the project’s second stage, with the ability to negotiate first offers for any remaining volumes.
The company’s investment in Thacker Pass is driven by the need to secure a long-term supply of lithium as the company continues to scale up its EV production.
According to Jeff Morrison, SVP, of Global Purchasing and Supply Chain of General Motors remarked,
“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. Sourcing critical EV raw materials, like lithium, from suppliers in the U.S., is expected to help us manage battery cell costs, deliver value to our customers and investors, and create jobs.”
GM’s Net Zero Pathway
The Michigian-based EV maker aims to achieve carbon neutrality in their global products and operations by 2040.
Source: GM
As described in GM’s sustainability report, significant progress made to reduce Scope 3 emissions include:
Battery production and expansion through Ultium Cells LLC- JV with LG Energy Solution, which is manufacturing cells for its Ultium Platform.
Collaborating with Tesla to integrate the North American Charging Standard (NACS) for their EVs. It will start in 2025.
Investing in home, workplace, and public charging infrastructure in the U.S. and Canada.
Investing in hydrogen fuel cell technology to reduce the carbon emissions of medium- and heavy-duty vehicles.
Addressing the barriers to EV ownership in the United States through dealership education and engagement.
Lithium Prices and Market Challenges
While the deal is progressing the lithium market is also fluctuating simultaneously.
MINING.COM reported that prices of battery-grade lithium hydroxide have experienced a sharp decline, falling to $9,800 per ton in October 2024 from $22,275 a year earlier. This marked a significant drop from the peak prices which were around $85,000 per ton in late 2022.
Despite these market challenges, Lithium Americas continues to advance the project, positioning itself to benefit from a projected long-term demand increase for lithium as the EV market expands. The company’s shares saw a 20.2% rise after the JV announcement. This showed investor confidence in the project’s potential.
Thacker Pass: The Gateway to North American Lithium Battery Supply Chain for EVs
The Thacker Pass project is well underway, with approximately 40% of the engineering design already completed. Major site preparations are progressing, with earthworks for the process plant excavation nearing completion and preparations for concrete placement underway.
Located in northern Nevada’s Humboldt County, Thacker Pass is home to the largest known lithium deposit in North America. 385 million tonnes of measured and indicated resources, equivalent to six million tonnes of lithium carbonate. The mine is expected to produce enough lithium to power one million electric vehicles annually, a critical contribution to the growing U.S. EV market.
Source: Lithium Americas
Lithium Americas is focused on getting the project ready for final investment decisions by the end of the year.
The project’s first phase targets a production capacity of 40,000 tonnes of lithium carbonate per year, with significant progress anticipated in the next few years.
What’s Next for Thacker Pass?
The next steps for the joint venture include finalizing engineering designs and procurement contracts as well as securing the final investment decision by the end of 2024. GM’s involvement in the project will help Lithium Americas unlock the DOE’s loan. Subsequently, this will provide the necessary financial support to fully develop the project.
As part of the agreement, GM and Lithium Americas are working closely with Bechtel, the project’s engineering, procurement, and construction management contractor. It can create around 1,800 direct jobs during its three-year construction period.
In the coming months, the Thacker Pass project will focus on de-risking and advancing construction to ensure it meets its targets for lithium production. Once operational, the mine will significant role in securing a domestic supply of lithium. Consequently, supporting the growing demand for EVs and pushing the U.S. clean energy transition.
Key Implications in the future:
Thacker Pass could provide lithium for up to 800,000 EVs annually, reducing U.S. reliance on foreign suppliers.
It supports the U.S. goal of net-zero greenhouse gas emissions by 2050, aligned with President Biden’s climate goals.
A domestic lithium supply chain would lower carbon emissions, transport costs, and supply chain risks for U.S. car manufacturers.
Sustainably sourced battery materials would help produce electric vehicles with a smaller carbon footprint.
Notably, Lithium Americas is also in a strong position to meet the growing demand for EV batteries. It will continue to secure additional funding to fuel its motive. However, at this moment, partnering with GM will significantly impact the domestic lithium market and in a good way.
Source: Lithium Americas News Release and General Motors Sustainability Report
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