Exxon Mobil, one of the world’s largest oil companies, plans to enter the lithium production market by 2027. The move is aimed at meeting the increasing demand for lithium, a crucial component in electric car batteries and advanced electronics.
As governments in the United States and Europe push for greater adoption of electric vehicles (EVs) and reduced reliance on fossil fuels, major oil companies are strategically investing in the electrification sector, Exxon Mobil said in a news statement.
Exxon intends to commence lithium production by extracting briny waters from subsurface wells located in an area in Arkansas known for substantial lithium deposits. The company aims to contribute to the development of a domestic source for this essential metal.
Dan Ammann, President of Exxon’s Low Carbon business unit, emphasized the global potential of lithium but highlighted the urgent need to ramp up domestic production. Exxon’s long-term vision includes supplying lithium for over 1 million EVs annually and becoming a leading global supplier of the metal by 2030.
The company plans to utilize conventional oil and gas drilling methods to access lithium-rich saltwater from reservoirs approximately 10,000 feet underground. Direct lithium extraction (DLE) technology will then be employed to separate lithium from the saltwater.
Exxon’s strategic partner in this venture is Tetra Technologies, Reuters reported on Saturday. Exxon will produce the metal on-site and market it under the brand name “Mobil Lithium.”
While Exxon did not disclose specific investment figures or profitability timelines, analysts estimate that achieving the company’s goal may require around $2 billion in capital expenditures to provide 50,000 tonnes of lithium.
Exxon’s move into lithium production follows its acquisition of the rights to 120,000 gross acres in the Smackover Formation in Arkansas earlier this year.
Unlike some European oil rivals like BP and Shell, which have invested in EV charging stations, Exxon has no plans to enter the charging infrastructure business. Instead, the company aims to focus on supplying lithium for EV batteries, consumer electronics, and energy storage systems supporting renewable energy sources.
Exxon Mobil, credited with inventing the rechargeable lithium-ion battery in the 1970s, is repositioning itself to play a pivotal role in the growing market for electric vehicles and sustainable energy solutions. With less than 1 percent of vehicles in the United States currently being electric, Exxon sees a vast opportunity for growth in the EV market.