Lithium Americas (LAC.US) jumps 21% premarket on new investment agreement with General Motors

Lithium Americas (LAC.US) saw a 21.72% premarket price increase after announcing a new investment agreement with General Motors (GM.US). Under the agreement, the two parties will establish a joint venture to be responsible for the construction and operation of the Thacker Pass lithium mine in Nevada. General Motors will invest $625 million, including $430 million in cash and $195 million in credit financing, to acquire 38% of the asset-level ownership of the project and support the first phase of construction. In addition, General Motors signed a 20-year offtake agreement, committing to purchase up to 38% of the production from the second phase of Thacker Pass and having the right of first refusal on the remaining production. The joint venture transaction replaces the $330 million common stock investment previously committed by General Motors under the original investment agreement announced in January.

The collaboration between Lithium Americas and General Motors marks further investment by automakers in the EV supply chain to ensure stable supply of key battery materials. The investment by General Motors includes both direct cash injection and credit financing, which will provide necessary funding support for the Thacker Pass project while the credit financing can serve as collateral to meet the reserve account requirements of the Department of Energy loans. The establishment of this joint venture not only brings funding and credit support to Lithium Americas but also provides a strong partner for its long-term development in the lithium mining market.

In addition, General Motors' offtake agreement ensures future lithium resource supply, which is crucial for its EV production plans. This long-term agreement covers not only the first phase production but also a significant portion of the second phase production, while retaining the right of first refusal on the remaining production, ensuring General Motors' lithium resource needs for many years to come.

The completion of this joint venture transaction also means that General Motors will no longer make the $330 million common stock investment under the original investment agreement announced in January. This shift indicates an adjustment in the cooperation model between the two parties to participate more directly in the investment and operation of the project, thus more effectively driving project progress and resource development. This strategic cooperation not only brings funding and market confidence to Lithium Americas but also ensures General Motors' supply security of key raw materials in the global EV competition.