(Bloomberg) -- General Motors Inc will commit $625 million toward what’s likely to be one of the biggest US lithium mines, reinforcing the automaker’s efforts to secure supply of the battery metal critical for electric vehicles.
The cash-and-credit funding deal announced Wednesday builds on a $320 million investment that GM made in Lithium Americas Corp. last year. It will be crucial toward the miner unlocking a $2.3 billion funding package the US Energy Department offered in March on a conditional basis.
GM will support Lithium Americas with an additional $430 million cash injection as slumping lithium prices heaps pressure on producers and threatens US efforts to shore up domestic supply. The Thacker Pass project in northern Nevada hosts the largest known lithium deposit in North America and is expected to produce approximately 40,000 metric tons per year once it’s fully operational.
Lithium Americas shares jumped as much as 25% to $3.34 before the start of regular trading in New York. GM’s stock rose as much as 0.8%.
The investment shows GM is pushing ahead with electric vehicles even as sales growth slows. While competitors including Ford Motor Co. have delayed or altogether canceled some EVs, GM will have more than 10 electric models on the market in the US by the end of next year, including the revived Chevrolet Bolt.
GM will form a joint venture with Lithium Americas and take a 38% direct stake in Thacker Pass as part of their deal. The companies described the transaction as the biggest-ever publicly announced investment by a US manufacturer in a lithium carbonate project.
The automaker has made other investments to lock up supply of lithium for its EVs. In 2021, GM partnered with Controlled Thermal Resources to extract lithium from the Hell’s Kitchen project in California’s Salton Sea Geothermal Field. Last year, the Detroit-based company’s GM Ventures fund invested $50 million in Energy Exploration Technologies, a US startup developing a process to extract lithium from brine.
(Updates with share move in the fourth paragraph.)
©2024 Bloomberg L.P.