The Trump administration is seeking as much as a 10% stake in Lithium Americas, the Canadian company developing the Thacker Pass lithium project in Nevada and a major supplier to General Motors, in return for easing repayment terms on a $2.26 billion loan from the Department of Energy. The discussions, which were first reported by Reuters, would represent an unusual step to acquire a direct government stake in a critical-minerals producer shaping U.S. electric-vehicle supply chains.
A Bid Linked to a DOE Loan Renegotiation
As part of a larger restructuring of the financing underpinning Thacker Pass, the government is seeking equity in case anything goes wrong, people familiar with the negotiations said. A White House official told Reuters that the administration hopes for the project to succeed in a way that protects taxpayers, suggesting a tougher attitude toward sharing risk on industrial policy bets.
If completed, it would add Lithium Americas to a small list of strategic projects in which Washington has negotiated upside through equity or warrants. Similar mechanics have emerged in recent U.S. deals linked to semiconductor and rare-earth initiatives, such as agreements involving Intel and MP Materials, intended to pair public capital with longer-term returns.
Why It Matters for U.S. EV Battery Supply Chains
Thacker Pass is one of the largest lithium deposits known in the Western Hemisphere. In the first phase alone, enough material would be produced each year for batteries to power around 800,000 electric vehicles, cementing a source of supply in the United States for a mineral that is now almost exclusively processed in Asia. Lithium Americas says additional development could double output.
The International Energy Agency estimates that demand for lithium, driven by electric vehicles and under announced policies, could triple this decade. In this scenario, prices surged in 2022, then fell sharply in 2023–2024 (keeping the long-term view of tight markets). Today, the U.S. accounts for only a single-digit percentage of global lithium production, and China has more than 50 percent of refining capacity, illustrating the strategic logic for projects like Thacker Pass.
GM’s Position and Long-Term Purchase Guarantees
GM was Lithium Americas’ cornerstone partner with a stake of about 38 percent for approximately $625 million, and the contract grants GM rights to the mine’s first-phase production and part of the second-phase production over as long as two decades. That offtake will cover enough material for an estimated 1.6 million EVs over the course of the agreement, according to company disclosures.
As part of the government’s proposal, GM has been asked to guarantee purchase orders it receives, according to people familiar with the discussions. The guarantee would do that by lowering project risk — fortifying revenue certainty, a common feature of critical-mineral financing these days — and dovetailing with North American sourcing rules enshrined in federal EV tax credits.
Equity Stakes as a Policy Tool for Critical Minerals
Washington’s willingness to take an equity stake represents a departure from pure grants and loans toward structures in which both risk and the upside of potential gains are shared. The approach is similar to practices foreign sovereign investors and American agencies have followed in previous spurts of industrial investment, such as auto rescues from the financial-crisis era that ended up earning money for taxpayers.
The deal would also test cross-border scrutiny for a Canadian-headquartered miner that operates in the U.S. Canada has deemed critical-minerals assets a matter of national sensitivity under the Investment Canada Act, and any investment tied to government can draw scrutiny. Meanwhile, Canada’s free-trade status allows its battery materials to meet U.S. consumer tax incentives, and “aligns the supply-chain facilities of both nations,” according to the joint statement.
Environmental and Legal Backdrop for Thacker Pass
Thacker Pass has faced legal and community problems, including lawsuits from tribal and environmental groups. Federal permits are in place, and six decades after it was first proposed the project has overcome major court challenges but still faces other appeals and compliance hurdles. Any equity establishment by Washington is probably going to raise the bar for stringent environmental stewardship and engagement with local stakeholders.
What to Watch Next as Loan and Equity Talks Progress
Determinants include the final equity percentage, any warrants or conversion features, and specifics of how the loan is restated. The market will also look for GM’s response to a purchase guarantee, and whether other automakers want similar commitments to ensure the supply of U.S.-aligned lithium.
For the administration, the deal would represent a high-profile test of an interventionist strategy in critical minerals — even as it takes another look at EV regulations. For the industry, it means that future federal backing could take on more stringent terms and shared upside in a nod to a model that may become the new normal for North American battery supply chains.
