The U.S. Department of Energy has gained equity stakes in Lithium Americas and the miner’s Nevada project with General Motors as part of an updated investment formula for a multibillion-dollar federal loan, an unusual arrangement that combines industrial policy with investor-style risk management. The no-cost, warrant-based stakes represent 5% in the parent company and a corresponding equity interest of 5% in the Nevada joint venture — ensuring that taxpayer upside is tied to this strategically significant project.
Lithium Americas shares surged in after-hours trading as investors absorbed the news, a reflection of how government support can recast risk perceptions around critical minerals. DOE officials called the equity additional collateral intended to mitigate repayment risk while building U.S. supply chains for electric vehicles.
DOE Takes Equity in Exchange for Loan Renegotiation
The new package is part of a renegotiation on the roughly $2.26 billion term loan with the DOE’s Loan Programs Office, which has proved key to U.S. buildouts in clean energy and advanced manufacturing.
In taking warrants — the right to buy shares at a set price — Washington is doing something that would both shift risk toward its taxpayers and ensure they share in any upside should the project succeed and valuations rise.
“The great majority of LPO transactions depend on first-lien collateral and very strict milestones. In this instance, the add-on equity reflects aspects of private project finance that we have observed in unstable commodity cycles. It is a sign of how the government is playing catch-up in adjusting to lithium’s boom-bust dynamics, as it wants more of the battery value chain brought back onshore.”
Why Thacker Pass Is Important for EV Supply Chains
Thacker Pass in Northern Nevada is one of the United States’ largest known lithium sources. The first phase alone could produce enough material for batteries in up to 800,000 electric vehicles every year, and a second phase could extend output further, Lithium Americas estimates. In a country that now produces slightly less than 1 percent of the world’s supply of lithium, as calculated through U.S. Geological Survey assessments, opening the mine is strategically important.
A domestic supply of battery-grade lithium carbonate would help reduce reliance on imports, which are dominated by Australia, Chile, and China’s refining complex. The International Energy Agency has repeatedly sounded the alarm that heavily concentrated supply chains for critical minerals create risks to resilience, national security, and the economy. Thacker Pass is expected to be the anchor for a wider North American battery ecosystem that will also include extraction, refining, cathode materials, and cell manufacturing.
GM’s Bet and the Joint Venture Model for Lithium Supply
GM previously committed hundreds of millions of dollars to Lithium Americas in exchange for an expansive equity ownership and the ability to buy all of the Phase 1 production, plus long-term rights into Phase 2. According to company disclosures, the joint offtake will support as many as 1.6 million electric vehicles over a two-decade period, a significant supply line for GM’s Ultium battery program.
With the DOE now holding warrants in both the parent and the venture, incentives across the capital stack are more closely aligned. The structure might be able to increase the bankability of further financing rounds, and would also give equipment vendors and EPCs a signal that the project will endure throughout price cycles.
Signals From Washington on Critical Minerals
The equity move is part of a broader push by Washington to leverage public balance sheets in order to spark domestic production of critical inputs, from semiconductors to rare earths. Officials have telegraphed plans to take stakes in more strategic companies, such as a proposed investment in MP Materials and the acquisition of a minority stake in a major U.S. chipmaker, signaling an evolution toward a more activist industrial strategy.
The Lithium Americas warrants were cast by the DOE as a hedge for taxpayers and a supply-chain safeguard. On the agency’s position: It aligns with warnings issued by national security analysts and energy-policy experts who say government ownership can hasten development timetables and draw in private capital for projects that face high up-front costs and long paybacks.
Risks and the Road Ahead in Nevada for Thacker Pass
Major mining projects seldom move in a straight line. Thacker Pass will need to navigate issues around water use, on-site processing facilities, and continued community engagement — including with Tribal nations — which have been points of contention in court challenges and environmental reviews in recent years. Fulfilling DOE’s schedule targets for construction and commissioning will be critical to unlocking funds — and staying on the timely path.
Lithium prices have gone from peaks to steep downturns and back toward stabilization, putting a premium on flexible financing. Warrants would give the federal government exposure to upside, without additional cash outlay, giving borrowers breathing room during commodity troughs. If Thacker Pass can scale, the payback would be twofold: a measurable move toward EV supply-chain independence, and some much-needed ROI for U.S. taxpayers that’s connected to real production rather than nebulous promises.
