Lithium Americas Corp. (LAC) shares tumbled 5.11% in pre-market trading on Thursday, continuing a downward trend that began despite a seemingly positive announcement of a strategic partnership with the U.S. Department of Energy (DOE). This decline follows a 9.09% drop in the previous session, suggesting investors are reassessing the implications of the government deal and responding to a recent analyst downgrade.

The slump comes on the heels of LAC's agreement with the DOE, which gives the government agency a 5% stake in both the company and its Thacker Pass lithium project in Nevada. The deal also unlocked the first $435 million drawdown from a previously announced $2.26 billion government loan. While initially viewed as a positive development for securing domestic lithium supply, market reaction has been mixed.

Contributing to the downward pressure, Canaccord Genuity downgraded Lithium Americas to Sell from Speculative Buy, maintaining a price target of C$6.50. This move likely sparked concerns among investors about the stock's near-term prospects. The contrasting views from analysts highlight the uncertainty surrounding the lithium market and the complex dynamics of government partnerships in strategic industries. Some market participants may be worried about potential dilution from the government stake or skeptical about the long-term impact of government involvement in the company's operations.