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Lithium Americas: Why This 31% Rally Is More Than Just a Headline
Written by Jeffrey Neal Johnson. Published 10/8/2025.
Key Points
- The company secured a strategic partnership with the U.S. government, validating the national importance of its Thacker Pass project.
- A long-term offtake agreement with a major automaker ensures a guaranteed revenue stream for the mine’s initial phase of production.
- With project financing now fully secured, the company’s investment profile has shifted from speculative development to operational execution.
Lithium Americas (NYSE: LAC) shares surged over 31% in a single session on above-average volume after unveiling a landmark agreement with the U.S. Department of Energy. The deal validates the Thacker Pass project’s strategic importance in America’s energy future and represents a major shift in the company’s risk profile and long-term value proposition.
The DOE Deal: From Lending to Partnership
At the heart of the rally is a non-binding agreement in principle for the first draw of funds from a federal loan under the Advanced Technology Vehicles Manufacturing (ATVM) program. Lithium Americas will receive an initial $435 million from a total expected loan of $2.26 billion. The ATVM program provided early-stage loans to companies like Tesla (NASDAQ: TSLA) and Ford (NYSE: F), underscoring the government’s confidence in the company’s potential.
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In exchange for these favorable terms, the U.S. government will take a 5% equity stake in Lithium Americas and a 5% economic interest in Thacker Pass via warrants with a nominal exercise price. This structure transforms the relationship from a simple lender-borrower dynamic into a strategic partnership, signaling that Thacker Pass is essential for building a domestic EV battery supply chain and reducing dependence on foreign critical minerals.
Risk Profile Transforms
Combined with existing funding, DOE support de-risks Lithium Americas, effectively transforming it from a speculative miner into an execution-focused development company. Phase 1 construction at Thacker Pass is now fully funded, driving the company’s market capitalization from about $1.4 billion to over $2 billion in days. Removing the financing overhang lowers the discount rate applied to future cash flows, boosting the project’s present value and shifting investor focus from fundraising risk to execution efficiency.
Thacker Pass: A Premier Lithium Asset
Located in Nevada, Thacker Pass is the largest known lithium deposit in the U.S., with an estimated 85-year mine life. Active construction and milestone achievements are already de-risking operations. Key highlights include:
- Scale: Phase 1 targets 40,000 tonnes of battery-grade lithium carbonate annually—enough for roughly 800,000 EVs per year.
- Cost: Operating expenses are projected at $6,238 per tonne over the first 25 years, ensuring robust margins even in lower-price environments.
- Progress: Detailed engineering is over 70% complete, reducing the risk of delays and cost overruns.
General Motors (NYSE: GM) has committed $650 million to the project and secured offtake for 100% of Phase 1 production. This guaranteed revenue stream insulates Lithium Americas from initial price volatility and paves the way to profitability.
Price Discovery and Next Steps
The DOE partnership has cemented Lithium Americas’ long-term potential. With Phase 1 fully funded and a foundational offtake agreement in place, recent analyst re-ratings and stock volatility reflect a new valuation framework for a fundamentally stronger company. Going forward, the market’s attention will shift to operational execution as the primary driver of value.
This transformation positions Lithium Americas as a leading, long-term investment vehicle for those seeking exposure to the multi-decade electrification megatrend from a stable, U.S.-based platform.
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