Energy Department Takes 5% Equity Stake in Lithium Americas After Restructuring $2.26 Billion Federal Loan
Washington’s $2.26 Billion Lithium Gamble Turns Into a Piece of the Action
The U.S. government isn’t just lending anymore—it’s buying a seat at the lithium table.
WASHINGTON — The Trump administration just rewrote the playbook for America’s industrial strategy. Instead of acting like a traditional banker, the Department of Energy has flipped its $2.26 billion loan to Lithium Americas into something far bolder: an ownership stake in one of the most important resources of the clean energy future.
On Tuesday night, officials unveiled the revised deal. The federal government now holds warrants equal to a 5% stake in Lithium Americas and another 5% in the company’s Nevada Thacker Pass project with General Motors. Wall Street wasted no time reacting—shares skyrocketed more than 34% in after-hours trading. Investors instantly recognized the shift: Washington isn’t just financing projects anymore, it’s becoming a shareholder.
“This structure lowers taxpayer risk while securing the supply chains we’ll need for clean energy,” Energy Secretary Chris Wright said in a televised statement. The package also brings in over $100 million in fresh equity, along with tighter loan terms to keep the project on track.
From Lender to Stakeholder
For decades, the US played the cautious banker, handing out loans and hoping companies didn’t default. This time, the DOE chose a different path. By taking warrants, the government gets a slice of future profits without putting up more cash, while still keeping strong collateral in case things go south.
That matters because lithium prices have been on a rollercoaster. Just last month, battery-grade carbonate hovered around RMB 73,000-78,000 per ton—far below the peaks that originally justified huge financing plans. By shifting from pure lender to co-investor, the DOE is sharing both the risk and the potential payoff.
This isn’t a one-off. Washington has already taken stakes in Intel and MP Materials, signaling a clear pivot: direct participation in sectors deemed essential for national security. For years, critics complained that government loans “socialized the risk and privatized the rewards.” This new approach flips that argument on its head.
The Nevada Giant: Thacker Pass
At the heart of this deal lies Thacker Pass, a claystone deposit in Nevada’s McDermitt Caldera that could become one of the continent’s largest lithium mines. Phase one alone is expected to produce 40,000 tons of lithium carbonate a year by 2027. That’s enough to power about 800,000 electric vehicles annually once operations hit full stride.
GM is already locked in. The automaker owns 38% of the project and has guaranteed it can buy nearly all of the first phase output—and much of phase two—for the next two decades. For the federal government, that kind of commitment from a Fortune 50 giant makes the risk more palatable.
But size doesn’t erase complexity. The project needs a sulfuric acid plant, hydrometallurgical systems, new water infrastructure, and supply lines through rugged terrain. Environmental groups and Indigenous communities have also raised concerns about sacred land and water use, keeping lawsuits and protests alive even after federal permits were granted.
A Signal to Wall Street
The government’s equity stake doesn’t just protect taxpayers—it sends a powerful message. If Washington is willing to stand behind a project, banks and foreign lenders may start viewing lithium investments less as a gamble and more as a safe bet. Analysts say this could draw in export credit agencies and new private capital that had previously steered clear of risky mining ventures.
There’s also the bigger picture: reducing America’s dependence on China. Right now, Beijing processes more than 60% of the world’s lithium despite holding far fewer reserves. By anchoring projects like Thacker Pass, U.S. policymakers can argue they’re shielding taxpayers while cutting reliance on a geopolitical rival.
The Price Problem
This new model wouldn’t exist without one hard truth: lithium prices have collapsed since their 2022 highs. Chinese production ramped up just as electric vehicle growth cooled, and that left projects like Thacker Pass exposed.
Phase one alone carries a $2.9 billion price tag. At today’s depressed prices, the economics only work if the company executes flawlessly and keeps costs under control. The government’s warrant structure gives taxpayers insurance—if lithium stays cheap, Washington shares in the pain, but if demand rebounds, it shares in the reward.
What Investors Should Watch
For Wall Street, the DOE’s move reshapes the math. Federal involvement lowers borrowing costs and boosts credibility, but the warrants also introduce the threat of dilution depending on their strike price. Investors will be watching closely for details in upcoming SEC filings.
Key triggers to monitor include:
- Disclosure of warrant terms.
- Progress on engineering and construction milestones.
- Expansion of lender groups.
- Ongoing environmental litigation.
The bottom line? Lithium Americas stock now comes with a “policy premium.” It offers upside from potential price recovery and government backing but carries execution risks, possible dilution, and regulatory hurdles.
If Thacker Pass succeeds and demand for EVs soars later this decade, taxpayers could see a rare win—profit from government involvement in a mining project. But if oversupply drags on or construction falters, Washington will find itself tested on whether owning a slice of lithium beats simply lending against it.
NOT INVESTMENT ADVICE