VANCOUVER — General Motors Co. has signed a deal to invest US$650 million in Vancouver-based Lithium Americas Corp., the latest move by an automaker to secure raw materials for their push into electric vehicles.
The deal, which GM said Tuesday is the largest investment yet by an automaker to produce mineral supplies, will give it access to production from the mining company's Thacker Pass lithium project in Nevada that could produce enough lithium for a million EVs a year.
Automakers have been striking deals for the rights to minerals for years, but the need to secure regional production has increased since the U.S. passed the Inflation Reduction Act, which links buying incentives to electric vehicles produced with materials sourced from approved countries.
“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," said GM chief executive Mary Barra in a statement.
The deal makes GM the largest investor in Lithium Americas, and helps move Thacker Pass towards the target production start of 2026, said company chief executive Jonathan Evans in the same release.
Under the agreement, GM will receive exclusive access to Phase 1 production from the mine through a binding supply agreement and a right of first offer on Phase 2 production.
In the first tranche of the investment deal, GM spend US$320 million for 15 million shares or a 9.999 per cent stake in Lithium Americas. The automaker will make a second investment worth US$330 million in the company’s U.S. business following a separation of its U.S. and Argentine businesses.
Numerous automakers have signed supply agreements with producers for key minerals like lithium, cobalt and nickel. Last year, both Volkswagen and Mercedes-Benz also signed agreements with the Government of Canada to explore raw material extraction prospects in the country.
This report by The Canadian Press was first published Jan. 31, 2023.
Companies in this story: (TSX:LAC)
The Canadian Press