Lithium Americas: A Plan To Make An Electric Car Battery Factory Near Tesla

Summary

• Lithium Americas has filed government documents to establish an electric car battery factory in Nevada (along with a lithium mine).
• Tesla and Volkswagen need to secure lithium now as investments in lithium are taking off.
• We explain risks and show you how we are playing this via options.

I'm not going to bore you with lengthy ramblings. The premise concerning lithium is very simple. Electric cars are coming in droves. Now is the time to invest in lithium and one company in particular has caught my eye for years - Lithium Americas (NYSE:LAC). Why is that? Because per government filed documents, Lithium Americas is proposing a lithium battery factory just north of Tesla (TSLA) and a lithium mine.

History Lesson

I've said it before and I'll say it again: Everyone has lithium, but few have the capital to actually develop a mine (much less the leadership.) LAC has both. Lithium Americas succeeded in building out a lithium mine in South America when the 800-pound lithium gorilla Sociedad Química y Minera (SQM) came on board. Later on, SQM sold its interest to the Chinese (who eventually acquired 51% ownership of the mine.) But ask - Why did LAC give up its controlling interest in the South American mine?

My theory is perhaps Lithium Americas has its eyes set on another prize... a much larger prize. Exiting from a controlling interest in the South American mine brought it additional capital, loans, and freed it from being in a JV with the Chinese. Given President Trump's bid to reduce foreign influence on rare earth elements, this was a strategic move that will allow for easier financing of the Nevada mine.

Eyes on the Prize and Tesla Battery Conference

China is going to need tons of lithium; the U.S. is going to need the white metal as well. Lithium Americas has a potential mine named "Thacker Pass" that is, as I write, going through the BLM (Bureau of Land Management) approval process in northern Nevada. Given the proximity to Tesla, it is not so crazy an idea that Tesla might partner up

Analyst’s Disclosure: I am/we are long LAC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.