Mentioned:
One of the largest car manufacturers in the United States of America is placing a big bet on the future of domestic lithium production.
What’s happening:
- Lithium Americas (NYSE: LAC) and General Motors have formed a new joint venture agreement to fund the construction and operation of the Thacker Pass lithium project
By the numbers:
- The new joint venture will see General Motors contribute a total of $625M USD of funding for a 38% stake in the project
- $430M USD will be funded as cash and $195M USD will be funded by way of a letter of credit
- General Motors previously invested $320M USD directly into Lithium Americas to purchase an equity stake in the company
Why it matters:
- This is the single largest investment ever by an United States automaker into a lithium carbonate project and represents enormous validation of the importance of the Thacker Pass project for domestic lithium supply
- The Thacker Pass project is aiming to become the single largest source of lithium production in North America once fully constructed and operational
Going deeper:
- The Thacker Pass project in Nevada also previously secured a multi billion dollar loan commitment from the United States Department of Energy, which is the single largest loan ever granted for an individual mining company
- General Motors has been making multiple different investments into the future of electric vehicles lately, previously launching a new partnership with EVgo (NASDAQ: EVGO) to build out flagship charging stations that resemble the architecture and design of traditional gas stations
The intrigue:
- Lithium companies have been seeing an uptick in the public markets recently, following Rio Tinto’s (NYSE: RIO) massive buyout offer for Arcadium Lithium (NYSE: ALTM) as well as multiple new funding commitments for hard rock lithium projects from the Canadian government
