General Motors Company GM has entered into a joint venture (JV) with Lithium Americas Corp. LAC. Per the JV, the automaker will supply $625 million in cash and credit to the Canadian mining company. The partnership focuses on developing, building and operating the Thacker Pass lithium carbonate mining project in Humboldt County, NV. The construction at the site began in March 2023 after Lithium Americas successfully resolved a lengthy and complicated legal battle with conservationists, ranchers and Indigenous groups.
Lithium is a crucial component of electric vehicle (EV) batteries. This agreement replaces a previously announced equity investment by GM into the Vancouver-based company. Sourcing U.S. lithium is essential for General Motors' plans to make its EV business lucrative and comply with tightening federal requirements for incentives to manufacture EVs and batteries.
Per Jeff Morrison, senior vice president of global purchasing and supply chain at GM, sourcing EV materials like lithium from the United States will help manage battery cell costs, benefit customers and investors, and create jobs.
GM will hold a 38% stake in Thacker Pass. The investment includes an initial $330 million cash contribution at closing, $100 million at a final investment decision for a project phase, and a $195 million letter of credit before accessing a $2.3 billion Department of Energy Loan. This JV follows General Motors' $320 million investment in Lithium Americas in February 2023, which included purchasing 15 million shares of the company. In August, General Motors and Lithium Americas postponed a $330 million second-tranche investment to explore alternative investment structures.
GM also announced a $10 million investment in Forge Nano, a material science company. The automaker plans to use the company's battery material coating on EV cells to enhance both performance and lifespan.
General Motors currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space are Modine Manufacturing Company MOD and Suzuki Motor Corporation SZKMY, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MOD’s fiscal 2025 sales and earnings suggests year-over-year growth of 8.44% and 18.77%, respectively. Earnings per share (EPS) estimates for fiscal 2025 and 2026 have improved by a penny and 8 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for SZKMY’s fiscal 2025 sales and earnings suggests year-over-year growth of 7.36% and 22.51%, respectively. EPS estimates for fiscal 2025 and 2026 have improved by 78 cents and 99 cents, respectively, in the past 60 days.
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