Active Stocks
Thu Apr 25 2024 15:57:40
  1. Kotak Mahindra Bank share price
  2. 1,643.00 -10.85%
  1. Tata Steel share price
  2. 167.60 1.27%
  1. State Bank Of India share price
  2. 812.60 5.10%
  1. Axis Bank share price
  2. 1,127.35 5.98%
  1. Power Grid Corporation Of India share price
  2. 292.60 0.71%
Business News/ Auto News / Exxon Makes Lithium Play in Long-Term Bet on EV Demand

Exxon Makes Lithium Play in Long-Term Bet on EV Demand


The oil company aims to become a major U.S. supplier of the mineral for electric-vehicle batteries makers by 2030.

Exxon Makes Lithium Play in Long-Term Bet on EV DemandPremium
Exxon Makes Lithium Play in Long-Term Bet on EV Demand

Exxon Mobil said Monday it is starting to drill for lithium in Arkansas and aims to become a major U.S. supplier for makers of electric-vehicle batteries by 2030.

The Texas-based oil company’s entrance into the lithium business, first reported by The Wall Street Journal in May, is an effort to reposition itself long-term for the advent of EVs and electrification in the transportation sector, which it dominated for decades as one of the world’s largest fuel makers. Lithium is a key ingredient in making batteries for EVs, cellphones and laptops.

Exxon’s purchase earlier this year of drilling rights on 120,000 acres in southwest Arkansas put it squarely in the center of a fledgling lithium industry working out how to profitably scale up technology that extracts lithium from underground saltwater abundant in defunct oil fields there.

The Journal had reported the transaction came in at north of $100 million. A consultant for the seller had estimated the prospect could have the equivalent of 4 million tons of lithium carbonate equivalent, enough to power 50 million EVs.

On Monday, Exxon hinted at its long-term plan for the first time. It said it is drilling its first lithium well in Arkansas’ Smackover region and plans to start producing battery-grade lithium by 2027.

The outlook around lithium has shifted in the past few months.

This year, lithium prices have plunged more than 60% through early October as new supplies have hit the market, and the growth in EV sales has eased, with some automakers cutting prices amid signs that demand is losing steam.

Exxon made clear it has a long horizon.

By the end of the decade, it expects to supply enough lithium to support the manufacture of more than 1 million EVs a year, and said it will look at how it could expand globally. Its talks with battery and EV makers are ongoing, it said.

“It’s a perfect example of how ExxonMobil can enhance North American energy security, expand supplies of a critical industrial material, and enable the continued reduction of emissions associated with transportation," said Dan Ammann, head of Exxon’s low-carbon business.

Ammann said extracting lithium from brine is more environmentally friendly than current methods in mining. In the former process, the saltwater is reinjected into the earth after lithium is extracted.

Making battery-grade material would require upgrading raw lithium in nearby processing plants that Exxon and others haven’t yet built. In July, the Journal reported Exxon planned to build one of the world’s largest lithium-processing facilities in the region, with a capacity to produce 75,000 to 100,000 metric tons of lithium a year.

In August, Exxon said it expects light-duty vehicle demand for internal combustion fuels will peak around 2025, and then slide down to early-2000s levels by 2050. It projected EV sales globally would climb almost 25% and lithium demand would quadruple by 2030.

The lithium industry, if it continues to grow in southwest Arkansas, is expected to bring thousands of jobs to a corner of the state that was in decline for decades after the 1980s oil crash. Thousands moved away as the region’s oil wells dried up and big plants closed.

Arkansas Gov. Sarah Huckabee Sanders said her administration would “continue to cut taxes and slash red tape" to support the lithium industry. By one estimate, building out planned lithium facilities in Arkansas would require some 6,000 jobs and north of 1,600 trucks by 2028.

Exxon isn’t only pivoting into the lithium business. In some ways, it is also returning to it.

In the 1970s, Exxon played a key role in the foundation of the lithium industry. Exxon chemist Stanley Whittingham won a Nobel Prize in 2019 for helping to develop the lithium ion battery while working at Exxon’s corporate laboratory in Linden, N.J.

Exxon began to manufacture the batteries in 1976, but the market ultimately proved too small, so the company ceased making the batteries some years later.

On Monday, Exxon said it would call its product Mobil Lithium.

Write to Collin Eaton at

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Next Story footLogo
Recommended For You
Petrochemical Stocks