GM to co-develop Nevada lithium deposit with Canadian miner amid EV ramp-up

DETROIT — General Motors is making what it says is the largest-ever investment by an automaker in battery raw materials production as it prepares to further ramp up electric vehicle production in the coming years.

GM said Tuesday that it will take a $650 million (all figures in USD) equity position in Lithium Americas Corp. and work with the company to jointly develop Nevada's Thacker Pass lithium mine. Lithium Americas said GM will become its largest shareholder, with a nearly 10 percent stake.

Lithium Americas said the mine can produce enough lithium for as many as 1 million EVs annually. GM plans to use lithium carbonate from the Nevada project in its Ultium battery cells.

"It's a landmark transaction, and it certainly won't be the last major supply chain announcement for GM," GM CEO Mary Barra told analysts on the automaker's fourth-quarter earnings call. "We continue to pursue strategic supply agreements and partnerships to further secure our long-term needs and drive investment in the United States and across North America."

GM says it has signed supply agreements to secure all of the raw battery materials needed to build 1 million EVs in North America by 2025 and now is working on supply agreements for 2026 and beyond. Production at the Thacker Pass mine is expected to begin in the second half of 2026, the companies said. GM said it has a binding deal providing exclusive access to the first phase of production and an agreement giving it the right of first offer on the second phase.

GM's investment will be made in two parts, with the first held in escrow until specific conditions are met, which is anticipated to happen by the end of this year, the companies said. The remainder will follow after Lithium Americas splits its U.S. operations from those in Argentina.

"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," Lithium Americas CEO Jonathan Evans said in a statement. "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 has committed $35 billion toward electric and autonomous vehicle development through 2025, with plans for its light-duty vehicle lineup to be emissions-free by 2035. Its first Ultium battery plant in Ohio started production last year, and the second is scheduled to open this year in Spring Hill, Tenn. A third, near Lansing, Mich., is slated to come online in 2024.

A planned fourth battery plant likely will not happen with LG Energy Solution, GM's Ultium Cells joint venture partner. Barra declined to comment Tuesday on the status of a fourth plant but said GM will need "a fourth plant and more plants beyond that."

Battery cell capacity is one reason EV production has been slower to scale, executives said Tuesday. GM has said it now expects to produce a total of 400,000 EVs in North America by mid-2024 rather than by the end of 2023, as the automaker previously forecast. The automaker reiterated Tuesday that it is on track to meet its 1 million EV production goal in 2025.

The Ultium Cells battery plant in Spring Hill may ramp up faster than the plant in Ohio has in part because "we actually have people from Spring Hill at the Ohio facility right now to make sure we have a smooth startup there," Barra said.

GM said it will have nine EVs on the market in North America this year, including the GMC Hummer EV pickup and SUV and the forthcoming Chevrolet Silverado, Blazer and Equinox EVs. Production of the Hummer EV SUV began this week.

"We'll be ramping up EV volumes throughout the year," GM CFO Paul Jacobson told reporters Tuesday. "We'll obviously be at a significantly higher run rate in the back half of this year than what we're starting, and it's really all indexed to cell capacity. So as we ramp up [Ohio] and continue to move forward on plants two and three, you're going to see volumes increase pretty significantly over that time period."