The Trump administration is in talks with Lithium Americas to arrange a loan deal that would support the company’s proposed Nevada project in return for up to a 10% stake, according to people familiar with the discussions and Reuters’ reporting. The target: Thacker Pass in Nevada, which would become one of the largest lithium projects in the Western Hemisphere and an important source for General Motors.
If approved, the deal would build on the government’s direct stake in a foundational battery mineral even as the White House has attacked aggressive electric-vehicle mandates. It’s a practical move with geopolitical overtones: bolster domestic lithium production, de-risk a flagship mine and protect taxpayers through upside participation rather than writing down those debts.
What the government wants from Lithium Americas deal
At the heart of the discussion is a straightforward deal: looser terms on DOE repayment or a restructure of the loan in exchange for that minority equity stake.
Officials have couched the ask as aligning incentives, ensuring that taxpayers benefit if Thacker Pass comes through at scale. Reuters reported the administration also sought that GM increase its offtake guarantees — essentially its backstopping revenue — given that the automaker’s position in the project is crucial to its economics.
Such structures aren’t unprecedented. Recent federal grants, for example, have come with warrants or profit-sharing arrangements that give the taxpayer a path to modest equity-like returns. The Title 17 Loan Programs Office is given wide discretion to negotiate “additional consideration” for risk, and it has embraced that flexibility as projects expand and capital markets grow more cautious.
Why the Thacker Pass lithium project matters now
Thacker Pass is the signature U.S. lithium project. The deposit is one of the largest in North America and production at the site is being ramped up gradually, Lithium Americas says. The company projected that its first phase could produce sufficient lithium for batteries in roughly 800,000 electric vehicles a year, while a second phase would maintain production for decades.
The resource comes as the United States looks to localize supply chains following the Inflation Reduction Act’s battery content regulations. The International Energy Agency projects that demand for lithium in electric vehicles could quadruple by 2030. But the United States currently accounts for a low single-digit proportion of global lithium supply, according to the U.S. Geological Survey, leaving automakers vulnerable to unpredictable import chains and competitor industrial policies abroad.
Market timing is another factor. Lithium prices have fallen from their 2022 peak — Benchmark Mineral Intelligence at one point estimated a decline of more than 70 percent — and financing for new mines is becoming increasingly scarce. A government backing and a take-or-pay underpin from GM could keep the project to time throughout commodity cycles.
GM’s stake in Lithium Americas—and its dilemma
GM is more than a customer; it’s the largest shareholder in Lithium Americas following a deal worth hundreds of millions of dollars and has rights to all phase-one output as well as into phase two, should that be initiated. All in, the offtake takes lithium for about 1.6 million electric vehicles over two decades, according to the companies’ estimates.
Securing those sales, as the administration is said to be eager for, would steady cash flows but also could tie GM into volumes if demand for EVs turns out bumpier than anticipated.
Automakers have adjusted rollout schedules as consumers weigh price, charging and model availability. Still, domestically sourced lithium gets GM further toward federal tax credit eligibility under battery content-related rules — and the economics might work even in a slower EV adoption scenario.
Precedents and policy logic behind a minority stake
Washington has in recent years tried out new instruments for strategic sectors. Warrants have been tacked on to semiconductor grants, for example, to capture upside; the same goes for defense-related mineral awards. A minority stake in a lithium producer would be the latest vehicle for that thesis: share some of the risk of building out domestic capacity and share some potential dividend if it ever pays off.
There are governance and legal issues. Any federal equity stake would probably contain constraints to prevent it from taking direct operational control of the businesses and reduce political influence over everyday decisions. Oversight organizations including the Government Accountability Office tend to examine these deals for transparency and fair valuation, particularly when private shareholders and public money intersect.
Key risks that may shape the Lithium Americas deal
Thacker Pass has faced environmental and cultural-resource litigation, with key permits so far surviving court challenges. Delays and cost overruns could also affect financing terms. At the same time, any need to shore up offtake guarantees from GM might depend on how quickly the automaker ramps its factories for Ultium-based models and how quickly utilities and retailers build out charging.
Geopolitics could also intrude. Restrictions on “foreign entities of concern” and changing trade measures could reset supply/purchasing dynamics and pricing. A more secure domestic base in the U.S. — which includes a foundation of Nevada lithium — provides policymakers with greater latitude to take action without undermining EV affordability or production goals.
What to watch next as negotiations progress
Key markers are whether DOE finalizes amended loan terms with equity-like features, the possible amount of GM purchase guarantees, and the way in which Lithium Americas sequences capital spending between construction of plants and mine development.
Keep an eye out for updates in company filings and statements from the Loan Programs Office.
Should the deal go through, it will be an indicator that federal industrial strategy is shifting away from grants and loans alone toward hybrid capital structures designed to help secure critical inputs. For the U.S. EV goals, securing lithium from Nevada wouldn’t just be symbolism — it’s a supply chain strategy in action.
