Washington — The United States is preparing to move from lender to shareholder in the country’s most consequential lithium project, with senior officials weighing the purchase of an equity stake of up to 10 percent in Lithium Americas as they renegotiate a $2.26 billion federal loan that underwrites processing facilities at Thacker Pass in Nevada. The proposed shift would mark a new phase of Washington’s industrial policy, one that tests whether direct ownership can steady a project facing weak prices, financing friction and hard questions about long term offtake.
The loan at the heart of the talks sits inside the Department of Energy’s Loan Programs Office. The agency’s project page confirms the structure and the scope, including capitalized interest and the purpose built conversion facilities adjacent to one of North America’s largest confirmed resources. DOE Loan Programs Office — Thacker Pass sets out the contours of that support and the limits of it too, since the debt finances processing rather than the open pit mine itself.
Lithium Americas closed the DOE financing last October, a milestone the company described as a culmination of multi year diligence and term setting and one that unlocked a fresh round of construction work on the Phase 1 plant. The company’s own release, closes $2.26 billion DOE ATVM loan, laid out the intended cadence of spending and the safeguards around it. Officials now want tougher conditions before the remaining tranches are drawn, according to people involved, a sign that the government’s risk appetite is evolving alongside the market.
General Motors is central to the debate because the automaker has already embedded itself in the project’s economics. In late 2024, GM agreed to contribute a mix of cash and letters of credit to a joint venture that gives it a 38 percent asset level stake in Thacker Pass Phase 1. Lithium Americas disclosed those mechanics in detail in an October filing, including how letters of credit can serve as collateral for reserve accounts that support the federal loan. See GM to contribute $625 million to JV with Lithium Americas.
Under the outlines under discussion, Washington would effectively add an equity layer to its existing creditor position. That could take the form of warrants or a direct stake, paired with stronger take or pay commitments that give lenders and taxpayers clearer comfort on revenue. The new terms would also sharpen GM’s purchase rights and obligations. On the news that the government could take up to a 10 percent stake, shares of Lithium Americas surged as investors read the signal as both political cover and commercial validation. Reuters reported that the stake size under consideration and the connection to renegotiated loan covenants.
Officials are candid about the strategic logic. China dominates refining and conversion capacity, price signals have been volatile, and private capital has grown more selective. The International Energy Agency’s latest outlook frames that challenge with unusual clarity, mapping how concentrated processing amplifies cyclical swings in supply investment. The relevant overview is here, IEA Global Critical Minerals Outlook 2025.
On the geology and output side, Thacker Pass is expected to deliver roughly 40,000 tons per year of battery grade lithium carbonate in its first phase once commissioning stabilizes later this decade. The federal listing describes the processing campus in Humboldt County and the logic of siting the chemical plant adjacent to the ore body to reduce logistics cost and risk. For additional reference on the underlying resource and the national balance, consult the USGS Mineral Commodity Summaries 2025 — Lithium.
What is changing now is not the mining plan so much as the financial architecture. Loan programs designed when prices were buoyant are being adjusted for a world in which spot and contract prices have softened and automakers are recalibrating their ramp. That is why the policy section of this story belongs up front. Washington is adding ownership to lending to push projects across the line and to send a price independent signal to the private market that battery grade supply inside the United States will be built through the cycle.
There is a second policy driver as well. Tariffs and retaliatory measures are remapping cost curves in ways that affect both automakers and miners. The administration’s levies have reshaped trade lanes and put parts of the industrial supply chain on a new timetable. Our recent reporting on how tariffs reshaping supply chains shows why lenders now price in customs risk when they model project cash flows.
For GM, the calculus is narrow and unforgiving. The company needs assured volumes of US sourced lithium for its Ultium cells, yet it is reluctant to sign up for obligations that outstrip demand in a choppy vehicle market. That tension helps explain why government negotiators want firmer take or pay commitments in exchange for easing amortization or adding equity support. The automaker’s original rationale for its upstream move still stands, documented in its announcement of a $650 million strategic tie up to secure domestic supply, according to Investor GM and Lithium Americas develop US sourced lithium production.
Inside the project fence, Bechtel is serving as the engineering, procurement and construction management contractor for the conversion facilities. The contractor’s footprint at Thacker Pass underscores a key point often lost in the equity versus debt debate. Execution risk can overwhelm clever capital structures if the delivery team is not scaled for a first of kind process plant.
There is more than financing mechanics to consider. Transmission, permitting cadence and interconnection queues shape the ramp of both supply and demand for electrification metals. The United States still struggles to build lines that match energy and industry policy. For that reason, we will link a companion review of grid bottlenecks so readers can see how delays upstream and downstream complicate cash flow projections for mines and midstream plants.
It is also worth viewing Thacker Pass through a global lens. Lithium supply lines run through Africa, South America and Australia, and the scramble for resources is reshaping politics and policy in states with fragile institutions. Our reporting on lithium mining in Africa explores how investor behavior, price cycles and national strategies intersect on the ground. The United States is not replacing those realities so much as adjusting to them.
That global lens carries a caution. The old Western extraction model is not only a moral problem, it is a commercial one that often produces political blowback, stoppages and cost inflation. Policymakers who advocate for public stakes in strategic projects argue that ownership can align incentives differently, potentially reducing the social friction that has dogged legacy mining. Whether that theory holds in practice at Thacker Pass will be one of the defining questions of the next three years.
Price weakness is the immediate headwind. Spot assessments have fallen far from their 2022 peaks and remain volatile as Chinese converters adjust output and export strategies. Benchmark commentary and live charts show why project investors have pulled back or demanded stronger covenants. For readers who want a quick view, consult a simple open chart here, TradingEconomics lithium price, and then read across to the IEA and USGS material above for structural context.
Tariffs on critical minerals and semifinished inputs also feed into the cost stack for new US projects. The administration’s emphasis on tariff driven reshoring carries consequences for upstream pricing and for the balance of risks that developers accept. See our related coverage on critical minerals tariffs and how commodity levies ricochet through financing models.
Automakers meanwhile are navigating a parallel set of pressures. There is consumer pushback against higher sticker prices, a battle over charging infrastructure and a race to wring cost out of battery packs. Those factors translate into tougher procurement standards and leave project sponsors with fewer places to hide when costs rise. Our piece on the auto sector under tariff pressure captures the broader squeeze that now defines the upstream downlink to mines like Thacker Pass.
China remains the baseline comparator in every one of these sentences. The country’s leadership in EV assembly and battery chemistry, in addition to conversion and refining, is the single most important variable in the project finance models sitting on desks in Washington and Detroit. For a compact look at how that advantage compounds, begin with our analysis of China’s EV lead and then read forward to the IEA and USGS material. If Chinese converters continue to export deflation through the value chain, US projects will need either thicker equity cushions, tighter offtake or policy backstops that last longer than a single electoral cycle.
Domestic opponents of the project and regional tribal governments have objected to parts of the plan and the manner of consultation, a dispute that is not simply a footnote. Human Rights Watch’s report details claims around rights, culture and remedies. The DOE’s own environmental process and the Record of Decision for the loan draw a boundary between financing processing facilities and the mine itself, which is governed by Interior. That distinction matters for legal risk, but on the ground it is a distinction that communities find unsatisfying.
All of that is the hard context in which the White House is considering a purchase. Supporters argue that a minority stake would symbolize national commitment and reduce political risk premia that swell financing costs. Skeptics see a precedent that invites rent seeking, especially if ownership is not paired with transparent, rules based criteria for future investments. There is, too, the unhelpful reality that policy victories can be swallowed by execution failures. The United States has delivered too few conversion plants on time and on budget to assume this one will go smoothly simply because the government writes a bigger check.
There is a still broader contest playing out as the United States attempts to correct a decade of strategic misses. The trade policy of recent years has often resembled theater, and in the lithium chain China still looks like the only country that can deliver scale at speed. Our editorial on US trade failure as China wins sketches that uncomfortable backdrop. Washington’s move toward equity may be read less as confidence than as an admission that loans and tax credits will not, on their own, deliver the supply base policy makers have promised.
There are plausible outcomes on either side of the ledger. If Washington buys in and pairs ownership with enforceable offtake, the JV could reach commissioning with a capital stack that holds together through the next downcycle. If talks fail and the debt’s terms remain misaligned with market realities, project schedules could slip, and private partners could reprice their risk yet again. Either path is a referendum on whether the United States intends to build conversion metal capacity that matches the scale of its rhetoric.
Investors should assume the government’s negotiations will pull in adjacent files. Expect to see tariff settings, permitting tweaks and credit markets discussed in the same breath as chemistry route selection and commissioning windows. Expect also to see Washington push automakers toward a portfolio of offtake that includes risk sharing rather than the off balance sheet guarantees that have become fashionable in recent years.
For the record, this article is grounded in primary documents and official listings, including the DOE’s Thacker Pass project page, Lithium Americas’ loan close notice and JV filings, GM’s upstream supply announcement and the DOE’s NEPA materials, supported by sector outlooks from the IEA and USGS and wire coverage that first detailed the equity stake under discussion. Additional market context is drawn from our reporting on tariffs and EV competition, cited above.
Readers who want the broader commodity and geopolitics canvas may revisit our analysis of how lithium mining in Africa is rewriting local economies and how China’s reach into new frontiers, including China’s hunt for lithium in Afghanistan, complicates Washington’s planning cycles.
