General Motors doubles down investment in lithium company

The adoption of electric vehicles has accelerated in the last few years. As the world moves away from internal combustion engine cars, more and more people are using electric cars as a means of combating global warming. Today, lithium is a critical component of batteries used in electric vehicles. That is why General Motors is doubling down their investment in a lithium company.

General Motors GM plans to invest $650 million in the company's lithium production company, Lithium Americas. It was the largest investment by an automaker to produce battery raw material.

The automaker will get exclusive access to the first phase of lithium production and the right to first offer on the second phase of lithium products that will come from the company's Thacker Pass in Nevada as part of the investment.

The investment will come in two tranches, according to a statement on the Lithium Americas website. After the separation of its U.S. and Argentine businesses, GM will receive $320 million first tranche investment for common shares representing 9.999% of the Lithium Americas before the separation, a $330 million second tranche investment and a Right of First Offer ROFO on Phase 2 production, according to Lithium Americas.

Announcing the investment, GM Chair and CEO Mary Barra said:

As the automaker starts to ramp up production of its EV trucks, it is important to secure sources of materials required to produce EV batteries. In a letter to shareholders on Tuesday, Barra said that 2023 would be a breakout year for its Ultium Platform, which is the automaker's battery platform for EVs.

Barra said GM is poised to produce 400,000 EVs in North America from 2022 through the first half of 2023.

In a joint statement, the two companies said that lithium production at its Thacker Pass in Nevada is expected to begin in the second half of 2026. The mine is expected to create 1,000 jobs and 500 jobs during operations, as the mine is being built.