General Motors (NYSE:GM) has agreed to establish a joint venture with Lithium Americas Corp. (T.LAC) that includes the automaker supplying $625 million U.S. in cash and credit to the Canadian mining business, the companies announced Wednesday.
The deal is centered on the development, construction and operation of a lithium carbonate mining operation called Thacker Pass in Humboldt County, Nevada. Lithium is a key component for batteries that power electric vehicles.
Securing raw materials such as lithium from the U.S. is crucial to GM’s plans to profitably grow its all-electric vehicle business and meet tightening federal requirements for incentives to produce and sell the vehicles and the large batteries needed to power them.
“We’re pleased with the significant progress Lithium Americas is making to help GM achieve our goal to develop a resilient EV material supply chain,” Jeff Morrison, GM senior vice president of global purchasing and supply chain, said in a release. “Sourcing critical EV raw materials, like lithium, from suppliers in the U.S., is expected to help us manage battery cell costs, deliver value to our customers and investors, and create jobs.”
GM shares approached noon EDT Wednesday up $1.20, or 2.5%, to $49.05, while those for LAC in Canada ballooned 65 cents, or 17.6%, to $4.35.