Trump’s ‘National Capital’ Strategy Targets Lithium with 10% Stake Bid

TradingKey - Shares of pure-play lithium producer Lithium Americas surged more than 80% in after-hours trading on Tuesday, breaking past $5.60 per share. The rally followed market reports that the Trump administration is actively seeking to acquire up to a 10% equity stake in the company.

This equity proposal stems from ongoing renegotiations between the U.S. government and Lithium Americas regarding a massive loan tied to the company’s flagship Thacker Pass lithium project in Nevada.

Originally approved during Trump’s first term, the $2.26 billion loan was finalized last year under the Biden administration by the U.S. Department of Energy’s Loan Programs Office.

However, shifting market conditions — particularly China’s lithium overcapacity, which has driven global lithium prices persistently lower — have raised investor concerns about Lithium Americas’ ability to service its debt. As a result, the first disbursement of the loan, originally scheduled for earlier this month, failed to materialize, prompting the Trump administration to seek revised loan terms.

According to a source familiar with the matter, the equity request emerged during recent discussions about the loan’s amortization schedule. In response, Lithium Americas offered the government warrants equivalent to 5% to 10% of its common shares at no cost.

Reports indicate that the U.S. government is not only seeking an equity stake but is also urging another key investor in the project — General Motors (GM) — to transfer partial project control to Washington. GM previously invested $625 million in the Thacker Pass project, securing a 38% interest and a long-term offtake agreement.

The Thacker Pass lithium mine is poised to become one of the largest in the Western Hemisphere. Its strategic importance has garnered bipartisan support, with both parties viewing the project as critical to boosting domestic production of key minerals — particularly lithium, a core component of electric vehicle (EV) batteries — and reducing reliance on overseas sources, especially China.

Phase one of the project is expected to come online in 2028, targeting annual production of 40,000 metric tons of battery-grade lithium carbonate — enough to supply batteries for up to 800,000 electric vehicles. By comparison, current U.S. lithium output remains minimal; for instance, lithium giant Albemarle produces less than 5 metric tons annually from its U.S. operations.

"President Trump is in favor of this project." "He wants it to be successful and fair for taxpayers," said a White House representative. "But free money doesn't exist." Analysts interpret the remark as underscoring the administration’s desire for the project’s success while signaling its intent to secure equity as compensation for assumed risk.

In fact, taking an equity stake in Lithium Americas would mark the latest example of the Trump administration’s intervention in the U.S. economy to accelerate the development of domestic supply chains for critical minerals — following similar moves to acquire stakes in companies like Intel and MP Materials.