- General Motors is investing $625 million in the electric vehicle supply chain.
- The funds will help Lithium Americas Corp develop and operate a major lithium mine in Nevada.
- Despite EV production cuts, GM aims to strengthen the domestic lithium supply chain.
Detroit-based automaker General Motors is pumping money into the domestic supply chain for electric vehicle batteries.
Canadian mining company Lithium Americas Corp announced in a press release on Wednesday that GM 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 will 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 states.
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 will give $430 million in cash to help fund the building of Phase 1 of the mine, as well as a $195 million letter of credit facility to be used as collateral for the DOE loan, according to the press release.
"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, 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 continued.
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 will 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 be scaling back its 2024 EV production goal by 50,000 units, as consumer demand for the battery-powered vehicles has waned and sales have slowed down.
Even so, the investment by GM will help the automaker secure a steady domestic supply of battery metals.
Despite the auto industry's recent pullback on EV production, lithium mining company Rio Tinto agreed last week to take over Arcadium Lithium for $6.7 billion, under the expectation that lithium demand will increase in the coming decade, The Wall Street Journal reported.