• General Motors said it plans to invest $650 million in the lithium production company Lithium Americas.
• Lithium is a critical component of batteries for electric vehicles.
• GM will get exclusive access to the first phase of lithium production and the right of first offer on the second phase of lithium production that will come out of the Thacker Pass mine in Nevada.

General Motors said Tuesday it plans to invest $650 million in Lithium Americas to secure access to lithium, a vital component of batteries for electric vehicles.

It's the biggest investment an automaker has ever made to secure sources of the raw materials that go into batteries, the companies said.

When the lithium is extracted from the Thacker Pass mine, which is the largest source of lithium identified in the U.S., and processed it will provide enough for GM to make as many as 1 million electric vehicles per year, the companies said.

Lithium is a critical component for batteries because it has a very high energy density and withstands charging and discharging well, according to GM and Lithium Americas.

"Direct sourcing critical EV raw materials and components from suppliers in North America and free-trade-agreement countries helps make our supply chain more secure, helps us manage cell costs, and creates jobs," GM Chair and CEO Mary Barra said in a statement announcing the investment.

Securing sources of materials is especially critical as GM looks to ramp up production of EVs. In a letter to shareholders also published Tuesday, Barra said 2023 would be "a breakout year" for Ultium Platform, its battery platform for EVs.

Barra said GM is on track to produce 400,000 EVs from 2022 through the first half of 2023 in North America.

In exchange for its investment, GM will get exclusive access to the first phase of lithium production and the right of first offer on the second phase of lithium production that will come out of the Thacker Pass project, according to GM and Lithium Americas.

Lithium production at Thacker Pass, in northern Nevada, is due to begin in the second half of 2026, the companies said, and will create 1,000 jobs as the mine is being constructed and 500 during operations.

"It's an exciting milestone, and we couldn't ask for a better organization than General Motors to become our largest investor," Lithium Americas President and CEO Jonathan Evans told CNBC. "GM shares our commitment to meaningfully advancing the energy transition, and I'm confident that together we can make Thacker Pass a major player in a secure, integrated North American supply chain from critical battery materials to EVs."

The $650 million from GM will be delivered in two portions. The money for the first tranche will be held in escrow pending the conclusion of a Record of Decision ruling currently pending in U.S. District Court.

Most recently, there was a hearing on Jan. 5 in the U.S. District Court, District of Nevada, regarding an appeal of the issuance of the Record of Decision for the Thacker Pass project. On Jan. 6, Lithium America said the court had confirmed there were no additional hearings or briefings required and that a final decision would be handed down "in the next couple months."

The second portion of money from GM will be released when Lithium America's U.S. business and Argentinian businesses officially separate and when Lithium America has "sufficient capital" to be able to fully develop the Thacker Pass site, GM said.

— CNBC's Pippa Stevens contributed to this report.