GM makes a $625 million lithium-battery move to shore up its EV supply chain
General Motors, headquartered in Detroit, is investing big in the electric-vehicle supply chain.
The Detroit automaker General Motors is pumping money into the domestic supply chain for electric-vehicle batteries.
Lithium Americas Corp., a Canadian mining company, announced in a press release on Wednesday that GM was investing a total of $625 million to fund the mining of lithium carbonate, a critical component of EV batteries.
The cash-and-credit joint venture is set to fund the development, construction, and operation of the Thacker Pass lithium mine in Humboldt County, Nevada, in which GM will acquire a 38% asset-level ownership stake, the press release said.
The automaker’s investment in Thacker Pass, the largest known lithium resource in North America, will also help Lithium Americas unlock a $2.3 billion conditional loan from the US Department of Energy, which was first announced earlier this year, the mining company said.
GM plans to give $430 million in cash to help fund the building of phase one of the mine, as well as a $195 million letter of credit facility to be used as collateral for the DOE loan, the press release added.
“Our relationship with GM has been significantly strengthened with this joint venture as we continue to pursue a mutual goal to develop a robust domestic lithium supply chain by advancing the development of Thacker Pass,” Jonathan Evans, the president and CEO of Lithium Americas, said in the company’s press release.
“Today’s joint venture announcement is a win-win for GM and Lithium Americas,” Evans added.
Jeff Morrison, GM’s senior vice president of global purchasing and supply chain, said in Wednesday’s press release that investing directly in the raw materials needed for EVs would help the company develop a resilient supply chain and “manage battery cell costs, deliver value to our customers and investors, and create jobs.”
GM’s investment in the EV supply chain comes after the automaker announced this summer that it would scale back its 2024 EV production goal by 50,000 units as consumer demand for battery-powered vehicles waned and sales slowed.
Even so, the investment by GM is poised to help the automaker secure a steady domestic supply of battery metals.
Despite the auto industry’s recent pullback on EV production, the lithium-mining company Rio Tinto agreed last week to take over Arcadium Lithium for $6.7 billion under the expectation that lithium demand would increase in the coming decade, The Wall Street Journal reported.
