On Wednesday, U.S.-listed lithium stocks and ETFs rose following reports that the U.S. government is in talks with Lithium Americas (LAC.US) to restructure a $2.3 billion Department of Energy loan through an equity investment, a move expected to benefit miners and project developers. At the time of writing, Lithium Americas surged over 90% in early trading to $6.14.

The news sent ripples across the industry, which has experienced months of volatility due to widespread and prolonged supply disruptions in China, later compounded by reports that major Chinese mines would resume operations earlier than expected.

However, Lithium Americas has seemingly reignited optimism in the sector. Reports indicate that the Trump administration is seeking to acquire up to a 10% stake in the company, sparking a 70% surge in its pre-market trading. This development stems from the U.S. government's efforts to renegotiate the terms of its $2.3 billion Department of Energy loan for the Thacker Pass lithium project.

The Thacker Pass project, valued at approximately $3 billion, was approved toward the end of Trump's first term, with the Department of Energy's loan finalized by the Biden administration last year.

Lithium Americas had originally planned to draw down the loan earlier this month, but officials from the Trump administration, citing concerns about the company's ability to repay amid depressed lithium prices, are now seeking to renegotiate the loan terms.

General Motors, which invested $650 million in the project last year for a 38% stake and secured rights to purchase all lithium from Phase 1 and part of Phase 2 of Thacker Pass over 20 years, is now being pressed by Trump administration officials to provide purchase guarantees.

GM relies on Thacker Pass to supply a significant portion of the lithium needed for its electrification transition. The company described the Department of Energy loan as "a necessary component of financing to commercialize this critical national resource."

This potential equity investment is part of the Trump administration's broader push to reshore U.S. manufacturing and strengthen domestic supply chains. Recently, the U.S. government has increasingly invested in both domestic and foreign companies to attract more manufacturing capital into the country.

On August 22, the U.S. government reached an agreement with Intel, planning to acquire approximately 9.9% of the company's equity for about $8.9 billion, making it one of Intel's largest shareholders.