Shares of Lithium Americas Corp. (LAC) plummeted 6.08% on October 17, 2024, despite the company announcing a joint venture deal with General Motors (GM) to develop the Thacker Pass lithium project in Nevada.

Under the terms of the agreement, GM will contribute $430 million in cash and a $195 million letter of credit, in exchange for a 38% stake in the joint venture. The deal replaces a previously announced equity investment by GM in Lithium Americas and is seen as a significant milestone in de-risking and funding the Thacker Pass project.

While the GM investment is expected to unlock a pending $2.3 billion loan from the U.S. Department of Energy, allowing Lithium Americas to proceed with the construction of the project, the market reacted negatively to the news. Analysts at Stifel GMP maintained their "buy" rating and $10 price target on LAC, citing the potential for a re-rating once the project is fully funded.

However, concerns over asset dilution, as Lithium Americas is giving up a 38% stake in Thacker Pass, and uncertainties around the project timeline and potential delays may have weighed on investor sentiment. Additionally, broader macroeconomic risks and inflationary pressures could have contributed to the sell-off in LAC's shares.