The mass adoption of electric vehicles has accelerated in recent years. Thanks to Tesla, more and more people are now embracing electric cars as the world moves away from internal combustion engine cars to combat global warming. Today, lithium is a critical component of batteries used in most electric vehicles. And that’s why automotive giant General Motors is doubling down on investment in a lithium company.
Today, General Motors (GM) announced it plans to invest $650 million into the lithium production company, Lithium Americas. It was the largest-ever investment by an automaker to produce battery raw material.
As part of the investment, 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 out of the company’s Thacker Pass in Nevada.
According to a statement on Lithium Americas’ website, the investment will come in two tranches. Lithium Americas will receive $320 million first-tranche investment for common shares representing 9.999% of Lithium Americas before separation; and another $330 million second-tranche investment, contemplated to be invested in the Company’s U.S. business following the separation of its U.S. and Argentine businesses (the “Separation”).
“After the first tranche investment, GM will receive exclusive access to Phase 1 production through a binding supply agreement and a Right of First Offer (“ROFO”) on Phase 2 production,” Lithium Americas said.
Announcing the investment, GM Chair and CEO Mary Barra said:
“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.”
Securing sources of materials required to produce EV batteries is especially critical as the automaker looks to ramp up production of its EV trucks. 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 on track to produce 400,000 EVs from 2022 through the first half of 2023 in North America.
The two companies said in a joint statement that lithium production at its Thacker Pass in Nevada is set to begin in the second half of 2026. The venture is expected to create 1,000 jobs as the mine is being constructed and 500 during operations.
“It’s an exciting milestone, and we couldn’t ask for a better organization than General Motors to become our largest investor,” Lithium Americas President and CEO Jonathan Evans told CNBC. “GM shares our commitment to meaningfully advancing the energy transition, and I’m confident that together we can make Thacker Pass a major player in a secure, integrated North American supply chain from critical battery materials to EVs.”
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- Source: https://techstartups.com/2023/01/31/gm-to-invest-650-million-in-lithium-company-lithium-americas-to-support-its-electric-vehicle-business/
