Lithium Americas (NYSE:LAC) is trending on social media, and LAC stock is up 10% after General Motors (NYSE:GM) announced this morning it would invest in the lithium miner.
The venerable American automaker, which has launched a huge push into electric vehicles (EVs), will make a $650 million equity investment in the company. Under the deal, GM will incorporate lithium from LAC’s Thacker Pass mine in its EV batteries and the automaker will obtain exclusive access to the lithium the company initially extracts from the mine. The facility is not yet operational.
What to Watch With LAC Stock
A federal judge said she would decide “in the next couple of months” whether to uphold former President Donald Trump’s decision to allow Lithium Americas’ Thacker Pass mine to open. The mine is expected to start yielding lithium in 2026.
According to LAC, Thacker Pass will produce enough lithium to power as many as 1 million EVs annually.
In a note to investors on Jan. 10, Deutsche Bank predicted lithium prices would climb in the second half of this year, while investors are becoming more bullish on lithium amid the rising demand for electric vehicles in China. The bank trimmed its price target on LAC stock to $30 from $34 but kept a “buy” rating on the shares.
Investors who own LAC stock or are interested in buying it should keep an eye on the litigation involving Thacker Pass and watch the direction of lithium prices. For such investors, another worthwhile area to watch is new technological developments in the battery space that could reduce EV makers’ reliance on lithium.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.