$Lithium Americas Corp.(LAC)$ has been on fire. The stock nearly doubled in just two trading days, with one day alone up almost 96%. The reason? A Reuters report that the Trump administration might revise a $2.3 billion Department of Energy loan to the company — and even take a 5%–10% equity stake. For a company worth less than $1 billion before the news, that was enough to send shares skyrocketing.
Now the question is: after such a huge jump, is it still worth buying?
Why This Company Matters
LAC owns the Thacker Pass project in Nevada, the largest known lithium deposit in North America. Lithium is the key ingredient for EV batteries, and the U.S. is trying to cut its dependence on imports from China, Chile, and Australia.
Phase 1 of Thacker Pass is expected to be up and running by late 2027, producing about 40,000 tons of lithium carbonate per year — enough for around 800,000 electric cars. Longer term, the mine could double that output.
GM already invested $650 million, taking a 38% stake and securing a 20-year supply deal. If the U.S. government joins in, LAC won’t just be another mining company — it’ll be a strategic asset for America’s EV supply chain.
Why the Stock Exploded
The surge came down to two things.
First, financing risk. The Thacker Pass project costs over $3 billion to build, and LAC only had about $500 million on its books. Investors worried the project could stall. With the DOE loan confirmed — and Washington possibly taking equity — that fear basically disappeared.
Second, valuation. If lithium prices recover to around $24,000 per ton (they’re about $10,000 now), Phase 1 could generate over $2 billion in annual cash flow. The project’s estimated value is close to $9 billion. Compare that to today’s market cap of under $1 billion, and you see why the stock was re-rated so quickly.
The Risks You Can’t Ignore
Still, the risks are real. After a two-day double, profit-taking could hit hard. If the government takes a 5%–10% stake, current shareholders will be diluted. Lithium is also a boom-bust commodity: it crashed from $80,000 per ton in 2022 to about $10,000 today. And Thacker Pass won’t produce anything until 2027. Between now and then, LAC will keep burning cash, and delays or cost overruns could bite.
Who Should Own It?
For short-term traders, jumping in now is dangerous. Volatility will be extreme, and you could lose double digits in a day.
For long-term investors, it’s a different story. If you believe EV demand will keep growing and the U.S. is serious about securing domestic supply, LAC is a strategic bet. It has the biggest resource, government backing, and GM as a partner. If the project delivers, the payoff in 2027 and beyond could be huge.
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