Lithium Americas Corp (LAC) Plunges 6.07% as Regulatory Hurdles and Geopolitical Risks Overshadow DOE Backing

Lithium Americas Corp. (LAC) shares plunged 6.07% on October 15, 2025, hitting a level not seen since October 2025, with an intraday drop of 9.45%. The selloff follows a volatile period marked by a 192% month-to-date surge earlier in October, driven by a strategic equity stake from the U.S. Department of Energy (DOE) in the Thacker Pass lithium project. However, recent gains have unraveled as concerns over regulatory hurdles and production timelines overshadow optimism.

The Trump administration’s 5% equity investment in Thacker Pass was initially seen as a validation of LAC’s role in the EV battery supply chain, but mixed signals from political and corporate insiders have introduced uncertainty. Ontario Premier Doug Ford’s public opposition to U.S. influence in Canadian mineral projects highlights potential regulatory friction. Analysts note the equity stake could accelerate timelines but warns of geopolitical risks complicating execution.

Short interest in LAC has surged to 13.38% of the float, reflecting skepticism about the company’s ability to generate consistent cash flow. While the stock has historically moved inversely to short interest, recent price action—rising despite elevated shorts—suggests a possible short squeeze scenario. However, analysts caution that near-term production delays or cash flow issues could trigger a sharp correction.

Insider transactions further complicate sentiment. A large insider sale in mid-October contrasted with subsequent buying activity, creating mixed signals. The government shutdown in October 2025 reduced transparency, amplifying the impact of corporate actions on investor decisions. With LAC’s Zacks Consensus Estimates projecting a $0.20 net loss for the current fiscal year, downward revisions in earnings forecasts underscore challenges in balancing capital expenditures with profitability.

Operating in the Basic Materials sector, LAC faces high capital intensity and regulatory complexity compared to peers. While the Thacker Pass project aims to produce 140,000 tons of lithium carbonate equivalent annually, execution risks—such as permitting delays and competition from low-cost producers—remain critical. The White House’s support has driven speculative interest, but analysts stress that consistent progress on project milestones will be key to sustaining investor confidence in the high-growth critical minerals space.