Lithium Americas Corp. (NYSE:LAC) shares are trading higher Tuesday after the company announced the closing of a $2.26 billion loan from the U.S. Department of Energy's (DOE) Loan Programs Office under the Advanced Technology Vehicles Manufacturing Loan Program. Here's what you need to know.

What To Know: The DOE loan will fund the construction of processing facilities at the Thacker Pass Project in Humboldt County, Nevada. The loan will have fixed interest rates based on U.S. Treasury rates and will provide financial support for Phase 1 of Thacker Pass. Thacker Pass is expected to initially produce 40,000 tonnes of battery-grade lithium carbonate per year.

The loan will work in conjunction with an investment agreement announced on Oct.16 with General Motors Co (NYSE:GM), under which GM will acquire a 38% stake in Thacker Pass through a joint venture. The company's total investment includes $430 million in cash funding for construction and a $195 million letter of credit facility to support reserve requirements under the DOE loan.

Lithium Americas CEO Jonathan Evans stated that the DOE loan "de-risks project financing" for Thacker Pass. He emphasized that the company aims to secure a domestic lithium supply chain, reducing dependence on foreign sources.

"We're pleased to have the Department of Energy's support to advance Thacker Pass to production and significantly improve domestic output of critical lithium supply to meet the growing domestic need," Evans said.

Thacker Pass is currently the largest known lithium resource in North America. Phase 1 production is scheduled to begin in 2027, with full capacity targeted at 80,000 tonnes annually across two phases. Lithium Americas noted that lithium produced at Thacker Pass could supply lithium needs for up to 800,000 electric vehicles annually.

LAC Price Action: Lithium Americas shares were up 7.61% at $4.46 at the time of writing, according to Benzinga Pro.

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