General Motors (GM) announced it will make a $650 million equity investment in Lithium Americas, representing the largest-ever investment by an automaker to produce battery raw materials.
The partnership targets a mining operation at Thacker Pass, Nevada, the largest known source of lithium in the United States and third largest globally. Lithium America estimates the materials extracted and processed from the project can support the production of up to 1 million electric vehicles (EV) per year.
“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 chief executive officer 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.”
Lithium carbonate from the operation will be used in GM’s proprietary Ultium battery cells. The batteries are designed to be resilient through repeated charging and discharging (including fast charging), delivering high energy density, and offering high levels of usable capacity, said the company.
Materials sourced from Lithium Americas is expected to support customer eligibility for EV tax credits under the Inflation Reduction Act, said the automaker.
The $650 million investment will be split between two tranches. The funds for the first tranche 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. If 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 by the end of 2023.
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 slated to begin in 2026. GM will have exclusive access to the first phase of production through a binding supply agreement and has the right to first offer upon the second phase of development.
“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.”
GM is launching a broad portfolio of trucks, SUVs, luxury vehicles and light commercial vehicles using the Ultium Platform, including the GMC Hummer EV Pickup and SUV, GMC Sierra EV, Cadillac LYRIQ, Cadillac CELESTIQ, Chevrolet Silverado EV, among others.
The automaker has announced four U.S. battery cell plants with annual capacity of 160 GWh, including the Ultium Cells joint venture plant with LG Energy Solution in Warren, Ohio, which is in production. It announced additional JV 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 plant, and its suppliers are investing to create a robust North America-focused supply chain for EV raw materials, processed material and components, with major projects under way in California, Texas, Ohio, and Quebec.
Read more about the U.S. efforts to establish a lithium supply chain here.
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From what I’ve seen over the decades, GM has been dragging their feet on the EV front. They only built the EV1 as a compliance car and as soon as the laws changed, they killed it. They’ve sat back and laughed at Tesla and wasted their time. Now they’re beginning to wake up to the fact that Tesla is eating their lunch and they’re starting to run around like the Keystone Cops. Their approach has been scatter-brained at best and they don’t appear to have any solid plan on how to compete in the EV revolution. There’s a large paradigm shift occurring and they’re having a terrible time adapting. The same can be said about Toyota, Ford, Honda, and many others. Hopefully, the American tax payer isn’t in for another big bailout of GM and other legacy automakers.
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