General Motors To Invest $650 Million Lithium Americas To Support Its EV Business

General Motors revealed on Tuesday January 31, 2023 that it plans to invest $650 million in Lithium Americas to gain access to lithium which is a key component of EV batteries. Lithium is widely sought after because of its extremely high energy density.

The mineral effectively handles repeated cycles of charging and discharging—including allowing fast charging. Its capacity is more usable when placed side-by-side with other types of batteries.

According to the announcement, both companies will jointly develop the Thacker Pass mine in Nevada, which has the largest known lithium deposit in the United States, and the third largest in the world.

“GM has secured all the battery material we need for production in North America in 2025,” said GM Chair and CEO Mary Barra. “Our future production will increasingly draw from domestic resources like the site in Nevada we are developing with Lithium Americas.

The new agreement will see GM make a $650 million equity investment in Lithium Americas, the largest investment so far by an automaker, for the production of battery raw materials. According to Lithium Americas’ estimate, the lithium that will be mined and processed from the venture can support the production of about a million electric vehicles annually.

“Direct sourcing of critical EV raw materials and components from suppliers in North America and free-trade-agreement countries increases the security of our supply chain as well as helps us manage cell costs, and create jobs,” Barra said.

General Motors has a broad portfolio of vehicles it plans to launch using the Ultium Platform, the automaker’s platform for battery electric EVs. The vehicles will cut across luxury vehicles, SUVs, trucks, and light commercial vehicles.

Ultim Platform hosts several elite brands including BrightDrop Zevo 600, BrightDrop Zev0 400, Chevrolet Equinox EV, Chevrolet Blazer EV, Chevrolet Silverado EV, Cadillac CELESTIQ, Cadillac LYRIQ, GMC Sierra EV, as well as GMC HUMMER EV Pickup and SUV.

The investment brings Thacker Pass closer to production

The investment by GM will be in two tranches. Funds for the first tranche of $320 million will remain in escrow until predetermined conditions are reached which includes the outcome of the Record of Decision ruling that is pending in the U.S. District Court.

A hearing was held on Jan. 5, 2023 in the U.S. District Court, District of Nevada based on an appeal on the issuance of the Record of Decision for the Thacker Pass project. A day after, Lithium Americas said the court affirmed that no further briefings or hearings were needed and that the final judgment will be delivered in a few months’ time.

Once the conditions are met, the fund in escrow will be released and GM will become a shareholder in Lithium Americas. The release of the fund is anticipated to happen in mid-2023. The second tranche of investment will go directly into Lithium Americas’ U.S.

Part of the condition for the release of the second tranche is the separation of the Argentina and U.S. lithium businesses. Also, Lithium Americas is expected to secure adequate capital to fund developmental expenditures that will support Thacker Pass.

“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,” said Jonathan Evans, the President and CEO of Lithium Americas.

The projected timeline for the commencement of production at Thacker Pass is the second half of 2026. The project is expected to create 1,000 jobs during the construction of the mine and 500 when it becomes operational.

“This relationship underscores our commitment to the development of a sustainable domestic lithium supply chain for EVs,” Evans said, “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.”

Through the binding supply agreement of the investment, GM will get exclusive access to the first phase of lithium produced at Thacker Pass and get the right to first offer on the second phase of lithium production.

GM is making a robust EV plan

The automaker has set the goal of making 400,000 EVs in the first six months of 2024. To ensure that nothing comes in the way of its plans, GM has announced 4 cell plants in the United States with a cumulative yearly capacity of 160-gigawatt hours.

This includes the already-in-production Ultium Cells plant in Warren, Ohio, a product of a joint venture with LG Energy Solutions. Other joint venture sites in Lansing, Michigan and Spring Hill, Tennessee are expected to start operations in 2024 and 2023 respectively. The first three Ultium Cells plants are estimated to create 6,000 jobs during the construction phase and 5,000 when they become operational.

At the moment, GM is building EVs in one plant in Ontario, one in Tennessee, and two in Michigan. Together with suppliers, GM is working hard to create a robust North American-centric supply chain for EV components, processed materials, and raw materials.

GM, Ford, and Stellantis have all invested in nickel, cobalt, and lithium producers or offered pre-financing. However, the latest investment by GM is a substantial escalation in the fight for unhindered access to battery raw materials. It also showcases the growing fusion between the mining and automotive industries.

GM prepares Michigan warehouses for the influx of EVs

In preparation for bringing dozens of new EVs to the market in the next two years, GM is investing $20.5 million into 3 of its Customer Care and Aftersales parts distribution centers in the United States. The money will be used for the installation of different automation technologies that will revolutionize the operations of the warehouses.

According to a GM statement on Thursday 26 January 2023, the sites that will be upgraded include Davison Road Processing Center in Burton, Michigan, Ypsilanti Processing Center in Ypsilanti, and GM’s Memphis Parts Distribution Center in Memphis, Tennessee.

“As we continue to invest in our workforce by modernizing our warehouse operations,” said John Roth, GM global vice president, Customer Care, and Aftersales, “implementing technology allows our organization to prepare for industry growth, especially as we expand for the EV future.”

Furthermore, Roth stressed that the new technology will reduce ergonomic stressors on workers to a minimum as well as lower the physical demand of work which will assist in the preparation for increased demand. 

“It can also fast-track the fulfillment of orders and ensure customers receive the right parts, at the right time, and in the right place,” Roth said.