Shares of Lithium Americas (LAC) skyrocketed Wednesday after the mining company announced the creation of a joint venture with General Motors (GM) to extract lithium, the element used in electric vehicle (EV) batteries, from a key Nevada mine.

Lithium Americas said that GM would put up $625 million and acquire a 38% stake in the Thacker Pass site. It added that $430 million of the money would be in a direct cash payment to support the construction of Phase 1 of the Thacker Pass lithium mine site, with the remaining in the form of credit that can be used as collateral to support reserve account requirements for a Department of Energy conditional $2.3 billion loan to develop Thacker Pass announced in March.

Lithium Americas would invest $211 million initially into the project and own the remaining 62% of the project

GM's Goal To Build 'Resilient' EV Supply Chain

The company added that this new deal with GM “replaces the $330 million Tranche 2 common equity investment commitment from GM under its original investment agreement” made in January 2023. 

Jeff Morrison, chief procurement and supply chain officer at GM, noted that the carmaker is “pleased with the significant progress Lithium Americas is making to help GM achieve our goal to develop a resilient EV material supply chain,“ and that getting critical raw materials, such as lithium, for EVs from domestic suppliers will “help us manage battery cell costs, deliver value to our customers and investors, and create jobs.”

Even with Wednesday’s 26% jump, shares of Lithium Americas are down more than a third for the year. GM shares were up about 2% Wednesday, and have added almost 37% of their value this year.