The U.S. government is reportedly contemplating acquiring a 10 percent stake in Lithium Americas, a Canadian lithium mining company, a move that could reshape the landscape of battery production and electric vehicle manufacturing in the country.
According to a report from Reuters, the White House’s interest in Lithium Americas is tied to a significant $2.2 billion loan proposal from the U.S. Department of Energy for the company’s Thacker Pass mining project located in northern Nevada. This ambitious endeavor is poised to be the largest lithium mining project of its kind in the Western Hemisphere, highlighting the administration’s commitment to bolstering domestic production of critical minerals that are essential for the burgeoning electric vehicle market.
On Wednesday, Lithium Americas confirmed ongoing discussions with both the Department of Energy and General Motors concerning the Thacker Pass loan. The potential investment marks a strategic pivot by the Trump administration, which has increasingly favored direct government ownership in key sectors to reduce dependence on foreign suppliers, particularly China, which currently dominates the global lithium refinery market.
China produces over 40,000 metric tonnes of lithium annually, ranking third globally behind Australia and Chile. However, it wields significant power in the refining sector, processing more than 75 percent of the world’s lithium into battery-grade materials. The Thacker Pass project is viewed as a critical component in establishing a reliable domestic supply chain for lithium, an essential metal used in manufacturing batteries for electric vehicles and various electronics.
The Trump administration has previously taken similar steps, such as acquiring a stake in chipmaker Intel and making the Department of Defense the largest shareholder in rare earths company MP Materials. Analysts have noted that the administration’s preference for equity stakes represents a politically palatable alternative to tax increases, potentially enhancing financing options, corporate profitability, and favorable returns on invested capital.
Following the announcement of these discussions, shares of Lithium Americas surged, with Canadian and U.S. listings both climbing approximately 90 percent, reaching 8.04 Canadian dollars ($5.78) in Canada and $5.80 in the U.S. The company’s market value stood at $744.5 million as of the last close on the New York Stock Exchange.
General Motors, which invested $625 million in the Thacker Pass project last year, currently holds a 38 percent stake. The automotive giant has secured the right to purchase all of the lithium produced during the initial phase of the project, along with a portion from the second phase for the next two decades. However, sources indicate that Trump officials are now seeking guarantees from GM regarding the procurement of this vital metal.
Analyst Mohamed Sidibe from NBCFM Research emphasized that the model established by the MP Materials and Department of Defense partnership illustrates how government equity, combined with long-term offtake agreements and price support, can mitigate risks associated with strategic projects. A similar arrangement for Lithium Americas could enhance funding and project stability, although it may lead to dilution for existing shareholders.
The Thacker Pass project is projected to commence production in 2028, a timeline that aligns with the growing demand for lithium as electric vehicle adoption accelerates. Morningstar analyst Seth Goldstein noted that an equity stake from the government could potentially include guarantees on offtake prices, which would enhance the project’s profitability even in scenarios where lithium prices remain subdued for an extended period.
As the U.S. gears up to reduce its reliance on foreign minerals and bolster its domestic manufacturing capabilities, the potential investment in Lithium Americas could be a pivotal move in securing a sustainable future in the electric vehicle and renewable energy sectors.
