General Motors Buys Into the Thacker Pass Mining Craze, but on One Condition

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General Motors (GM) wants American lithium. It comes as no surprise. The Inflation Reduction Act (IRA) put every automaker on its toes. They must now invest in the U.S. or its vetted partners or risk losing the opportunities offered by the American market. But here’s why GM’s decision can become quite controversial.
Last year, we were looking at Thacker Pass as a possible solution to China’s dominant EV market position. Whilst American states were exploring or deciding on how and when to end the existence of the internal combustion engine for passenger cars, the domestic automotive and mining industry was not following up with these ambitions. Keep in mind that we were telling you all this before the Inflation Reduction Act (IRA) received bipartisan support in Congress and the President’s signature.

One idea that we explored was Thacker Pass. Located in Nevada, this remote and unhospitable place is very rich in one key element for EVs – lithium. Today, most all-electric cars out there use lithium iron phosphate (LFP) or lithium-ion batteries. Even the much-anticipated solid-state batteries need lithium.

So, by just looking at this one fact, we can understand that the race for this “precious” metal is one against the clock. Unless Toyota, BMW, or Mercedes-Benz figure out how to sell fuel-cell vehicles to as many people as possible and as fast as humanly possible while also convincing governments in key markets to invest in hydrogen fueling stations, the only zero-tailpipe emission route that we might have to follow is the battery-electric vehicle (BEV) one. And, as its suggestive name indicates, these energy storage units… These little cylindrical or pouch-like cells are paramount.

Proposed Mining Operation
Photo: ABC News on YouTube

A reality check

So, could Thacker Pass be America’s solution to China’s dominance in battery manufacturing?

When we looked at it, we discovered that for humans, it wouldn’t be a big problem to start mining operations there. The prospect of generating approximately 60,000 metric tons (66,139 U.S. tons) of usable lithium carbonate every year is incredibly attractive. It would be enough for around 952,381 Tesla Model S 70-kWh batteries. That may be why the EV maker’s CEO said last year that mining and refining might be on the company’s to-do list in the future. Tesla already has mining rights in Nevada since 2020, so this wouldn’t be such an outrageous thing to do for a marque that sells only EVs. It also happens to be the world’s most valuable automaker at the time of writing.

However, there are challenges. Water is a scarce resource in that part of Nevada. To mine and process lithium, vast amounts of H2O are needed. Besides that, there are farms in the area that should be relocated. Moreover, wildlife could suffer because of industrial development. So, there are a couple of issues and maybe even a lot more than the abovementioned ones. However, we can’t look at all of them right now.

To help put things into perspective, Ningde-based CATL is the world’s top battery manufacturer and ended 2022 with a 34% slice of the EV battery market. Moreover, Asia’s championing the fight for battery manufacturing, according to an analysis done by SNE Research. The remaining nine spots in the top 10 are occupied by five other Chinese companies, three South Korean entities, and Japan’s Panasonic.

Active Mining Operation
Photo: ABC News on YouTube
After Tesla managed to overcome the dissuasion from legacy automakers and non-believers, the electric vehicle didn’t look like such a pretentious thing. Moreover, the powers that be figured out global warming is an issue that must be tackled. The data pointed the finger at road transport as being one of the largest sources of emissions, so the race to make EVs as attractive as possible and sustainable started.

Where does General Motors fall into all of this?

Somehow, China managed to get ahead of everyone, and at the time of writing, Warren Buffett-backed BYD is the world’s number one EV seller. So, not only does China have the biggest battery manufacturing players, but it also has the production capacity to make these vehicles. This means a shorter supply chain, lower production costs, and cheaper EVs. Now, that’s what America and Europe do not have.

As America’s number one carmaker, General Motors is a key industry player that must do the same as BYD, and it needs to hurry up. So, despite pushback and many challenges, Thacker Pass is what it chose.

The automaker announced $35 billion in EV and autonomous vehicle (AV) investments a couple of years ago, and that has already shown its effects through vehicles like the Hummer EV, the Chevy Bolt EV and EUV, the Blazer EV, the Cadillac Lyriq, and other upcoming models. Most notably, the company intends to manufacture 285,000 all-electric vehicles next year across its plants in North America. These cars need batteries. And the benefits included in the IRA are for those auto companies that either make their stuff in America or work only with close U.S. allies.

2023 Cadillac Lyriq SUV
Photo: Cadillac
GM’s $650 million investment in Lithium Americas Corporation marks the beginning of a push towards total and somewhat sustainable electrification. A shorter supply chain will mean fewer total emissions per EV made, and that might help with convincing more people that the internal combustion engine is going to slowly become a thing of the past.

Lithium Americas Corporation is developing a major lithium mine in Nevada’s Thacker Pass and when it will be done, this will be America’s largest such operation. However, GM is aware of the struggles associated with this project and conditioned its investment on clearing every possible challenge. Right now, there’s an ongoing trial between the mining company, tribes, and environmental organizations.

Lithium Americas Corporation has the backing of the Bureau of Land Management (BLM), but the tribes claim the land is sacred, and the conservation groups fight for the wildlife in the area. Moreover, the U.S. is planning to give battery manufacturers a subsidy of $45 per kWh. This might be another reason why we’ve seen foreign automakers and companies like LG hurrying up to establish new plants in America.

At the end of the day, GM might have announced an impressive investment into lithium production, but it all hangs in the balance. Justice will ultimately prevail, and we’ll find out if the U.S. gives up Thacker Pass.
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About the author: Florin Amariei
Florin Amariei profile photo

Car shows on TV and his father's Fiat Tempra may have been Florin's early influences, but nowadays he favors different things, like the power of an F-150 Raptor. He'll never be able to ignore the shape of a Ferrari though, especially a yellow one.
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