The U.S. Department of Energy (DOE) will take 5% equity stakes in Canadian lithium producer Lithium Americas and its Nevada joint venture with General Motors, according to a DOE announcement on Tuesday. The move is part of a renegotiation of a $2.26 billion federal loan awarded under the Biden administration.
The stakes will be acquired through no-cost warrants, which give the government the right to purchase shares at a predetermined price. The DOE said the equity positions will serve as additional collateral on the loan, helping to reduce repayment risk for taxpayers. Shares of Lithium Americas surged 34% in after-hours trading following the announcement.
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Lithium is a critical component in batteries for electric vehicles (EVs) and consumer electronics, but U.S. domestic production remains low. “Despite having some of the largest deposits, the United States produces less than 1% of the global supply of lithium. Thanks to President Trump’s bold leadership, American lithium production is going to skyrocket,” U.S. Energy Secretary Chris Wright said in a statement. “Today’s announcement helps reduce our dependence on foreign adversaries for critical minerals by strengthening domestic supply chains and ensures better stewardship of American taxpayer dollars. President Trump promised to do both and he is delivering.”
Lithium Americas is developing the Thacker Pass project in Nevada, which is expected to produce sufficient lithium for as many as 800,000 EVs annually during the first phase. General Motors acquired a 38% stake in the company last year for $625 million, securing rights to purchase lithium from the mine for up to 20 years, enough to supply 1.6 million EVs across two decades.
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The DOE’s action reflects a broader trend of the U.S. government taking ownership stakes in key domestic industries. Previous announcements have included planned 10% stakes in Intel and MP Materials, a U.S.-based rare earths producer.
The revised terms for the Lithium Americas loan aim to bolster domestic supply of critical minerals while mitigating financial risk to taxpayers as the United States seeks to expand its EV battery supply chain.