US-Backed Lithium Americas Hit by Rising Costs on Trump Tariffs

Cost Overrun at Nevada Lithium Project

Lithium Americas Corp. has raised the estimated cost of building the first phase of its Thacker Pass lithium mine in Nevada by nearly $900 million, taking the projected figure to $3.83 billion from an earlier estimate of $2.93 billion. The company attributed the increase to tariffs imposed by the Trump administration, which made equipment ordered from outside the United States more expensive, along with higher labour costs for piping, steel and equipment amid competition for skilled workers, and elevated logistics expenses. Its shares fell as much as 10% to a record low of $1.70 before closing 7.7% lower in New York trading, and the stock has declined about 60% this year.

Why the Project Matters

Thacker Pass is central to Washington's effort to reduce reliance on China for lithium, a critical mineral for batteries. The project holds a $2.3 billion federal loan made under former President Joe Biden, which the current administration sought to convert into an equity stake. General Motors Co. owns a portion of the venture after committing $625 million. Once the first phase reaches full capacity, the mine is expected to produce 40,000 metric tons a year of battery-grade lithium carbonate, which would make it North America's largest lithium mine and significantly expand US output. The United States holds some of the world's largest lithium deposits but produces less than 1% of global supply, while China dominates processing and lithium-ion battery production. The company now estimates an additional funding requirement of about $995 million, with $650 million expected from its own contributions and $315 million from accounts funded under the Department of Energy loan. It said the construction schedule remains unchanged, with production targeted for 2028.

What to Watch

The cost escalation comes as lithium prices have fallen by more than half from a May peak, on expectations of weaker battery-demand growth and additional supply. A …