Electronics and Semiconductors

GM makes largest-ever automotive investment in EV raw materials

03 February 2023
GM is quickly expanding its portfolio of EVs including the recently released Chevrolet Silverado EV. GM has invested in EV battery raw materials vendor Lithium Americas to guarantee a supply of raw materials for its Ultium battery line. Source: GM

General Motors Co. will take a $650 million equity investment in Canadian vendor Lithium Americas Corp. in what is claimed to be the largest-ever investment in battery raw materials by an automotive OEM.

Lithium Americas is developing the Thacker Pass mine in Nevada, which is the largest known source of lithium in the U.S. and the third largest in the world. Lithium is a key material in lithium-ion batteries that allows the repeated charging and discharging of high energy density for use in electric vehicles (EVs).

As part of the deal, the lithium carbonate from Thacker Pass will be used in GM’s proprietary Ultium battery cells. Lithium Americas estimates it can extract and process from the mine enough raw materials to produce up to 1 million EVs per year.

Why it matters

GM is accelerating its transition to electrification. Two years ago, GM vowed to phase out gas and diesel vehicles by 2035 with its plans to become carbon neutral by 2040. Then one year ago it invested $7 billion in four EV manufacturing sites in Michigan in what the company said was the single largest investment in its history.

GM has also invested in new battery plants including an Ultium cells joint venture plant with LG Energy Solution in Warren, Ohio, which is in production. And additional JV sites in Spring Hill, Tennessee, and Lansing, Michigan, scheduled to open in 2023 and 2024.

GM is launching a wide portfolio of trucks, SUVs, sedans and light commercial vehicles using the Ultium platform. This includes the following cars already announced:

  • GMC Hummer EV
  • GMC Pickup EV
  • GMC Sierra EV
  • Cadillac Lyriq
  • Chevrolet Silverado EV pickup
  • Chevrolet Blazer EV
  • Chevrolet Equinox EV
  • BrightDrop Zevo 400
  • BrightDrop Zevo 600

This combined with potential shortages in EV batteries and raw materials as well as price hikes for both batteries and raw materials, GM is looking to secure the components needed to keep on track with its electrification plans.

“GM has secured all the battery material we need to build more than 1 million EVs annually in North America in 2025 and our future production will increasingly draw from domestic resources like the site in Nevada we’re developing with Lithium Americas,” said Mary Barra, GM and CEO of GM. “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.”

The investment

The investment in Lithium Americas will be split into two tranches; the first will be held in escrow until conditions are met including regulations and court documents; and the second investment will be made following the separation of Lithium Americas’ separation of its U.S. and Argentina businesses.

Production at Thacker Pass is projected to begin in the second half of 2026 in connection with the first tranche investment where GM will receive exclusive access to Phase 1 production and has the right to first offer on Phase 2 production.

The Thacker Pass mine is expected to create 1,000 jobs in construction and 500 in operations.

To contact the author of this article, email PBrown@globalspec.com

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