GM and Lithium Americas Partner for U.S.-Sourced Lithium

General Motors Co. and Lithium Americas Corp. announced they will jointly invest a total of $650 million to develop the Thacker Pass lithium mine in Nevada. The location is the largest known source of lithium in the United States and the third largest in the world.

Locating and developing domestic sources of lithium has taken on new importance because the EV tax credits in the Inflation Reduction Act of 2022 are dependent on a rising percentage of domestically produced battery minerals. GM has been moving to secure a steady and sufficient supply of U.S.-sourced lithium. Currently, most of the world’s lithium is mined in China. 

Partnering for EV production at scale

Under the agreement, GM will make a $650 million equity investment in Lithium Americas, which represents the largest-ever investment by an automaker to produce battery raw materials. Lithium Americas estimates the lithium extracted and processed from the project can support production of up to 1 million EVs per year.

Lithium carbonate from Thacker Pass will be used to create the lithium-ion structure in GM’s proprietary Ultium battery cells. Lithium-ion batteries are tolerant of repeated charging and discharging (including DC fast charging), and they deliver higher energy density and more usable capacity than other battery chemistries.

A steady supply of battery minerals is critical because GM plans to launch a broad portfolio of trucks, SUVs, luxury vehicles and light commercial vehicles using the Ultium Platform. Existing EV projects include the GMC Hummer EV Pickup and SUV, GMC Sierra EV, Cadillac Lyriq, Cadillac Celestiq, Chevrolet Silverado EV, Chevrolet Blazer EV, Chevrolet Equinox EV, BrightDrop Zevo 400 and BrightDrop Zevo 600.  

In addition, TheDetroitBureau.com recently viewed several prototype clay EV models at GM’s Design Center in Warren, Michigan. The potential new EVs included a compact pickup truck and a pair of small SUVs, all designed to be affordable. GM stated the new models would start under $30,000. 

“GM has secured all the battery material we need to build more than 1 million EVs annually in North America in 2025 and our future production will increasingly draw from domestic resources like the site in Nevada we’re developing with Lithium Americas,” said GM Chair and CEO Mary Barra. 

“Direct sourcing critical EV raw materials and components from suppliers in North America and free-trade-agreement countries helps make our supply chain more secure, helps us manage cell costs, and creates jobs.

The new law requiring domestic sourcing of battery minerals has supercharged business prospects for companies like Lithium Americas. 

“The agreement with GM is a major milestone in moving Thacker Pass toward production, while setting a foundation for the separation of our U.S. and Argentine businesses,” said Lithium Americas President and CEO Jonathan Evans. 

“This relationship underscores our commitment to develop a sustainable domestic lithium supply chain for electric vehicles. We are pleased to have GM as our largest investor, and we look forward to working together to accelerate the energy transition while spurring job creation and economic growth in America.”

How will the investment work? 

GM’s investment will be split into two tranches. The initial funds will be held in escrow until certain conditions are met, including the outcome of the Record of Decision ruling currently pending in U.S. District Court. When those conditions are met, the funds will be released and GM will become a shareholder in Lithium Americas. The escrow release is expected to occur no later than the end of this year. 

The pending ruling concerns a lawsuit brought by ranchers, environmentalists, and Native American tribes who contend the mining operation would have permanent negative effects on the region, including contaminating water supplies. Chief Judge Miranda Du of the U.S. District Court in Reno, Nevada is reviewing the case and plans to rule in the next few months.

The second tranche investment is expected to be made into Lithium Americas’ U.S.-focused lithium business following the separation of its U.S. and Argentina businesses and is contingent on similar conditions, including Lithium Americas securing sufficient capital to fund the development expenditures to support Thacker Pass.

Production at Thacker Pass is projected to begin in the second half of 2026. In connection with the closing of the first tranche investment, GM will receive exclusive access to Phase 1 production through a binding supply agreement and has the right of first offer on Phase 2 production. Lithium Americas expects Thacker Pass to create 1,000 jobs in construction and 500 in operations.

GM goes all-in on battery manufacturing

GM previously announced plans to build four U.S. battery cell plants with annual capacity of 160 gigawatt hours, including the Ultium Cells joint venture plant with LG Energy Solution in Warren, Ohio, which is already in production, and additional sites in Spring Hill, Tennessee and Lansing, Michigan that are scheduled to open in 2023 and 2024, respectively. The first three Ultium Cells plants are expected to create 6,000 jobs in construction and 5,000 in operations.

GM is currently building EVs in two Michigan plants, one Tennessee plant and one Ontario, Canada plant. To remain eligible for EV tax credits, the company is developing its North America-focused supply chain for EV raw materials, processed material and components, with major projects under way in California, Texas, Ohio and Quebec.

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• Source: https://www.thedetroitbureau.com/2023/02/gm-and-lithium-americas-partner-for-u-s-sourced-lithium/