Exxon Mobil to Produce Lithium in 2027

Despite the volatility in lithium prices, Exxon Mobil is venturing into production, recognizing lithium as a crucial mineral for electric vehicle batteries. The company stated that this new venture will coexist with its oil business, providing comprehensive solutions to various industries.

Exxon’s ambitions to become one of the top lithium suppliers, marking its first significant move away from fossil fuels in decades, have faced scrutiny after lithium prices plummeted over 80% in 2023 due to oversupply and slower demand growth. Nevertheless, the company remains committed to having its first project operational by 2027, aiming to produce enough lithium for 1 million EVs annually by 2030.

“At the moment, the sentiment around lithium is bearish. However, there is an underlying growth story for electric vehicles and the lithium-ion batteries used in them. We recognize that the world urgently requires significantly more lithium than is currently being produced,” said Patrick Howarth, Head, of Global Lithium Business, Exxon Mobil.

The company stressed that while demand for lithium represents a significant opportunity, there is also a continuing need for internal combustion engine (ICE) vehicles, which Exxon plans to continue to support. The company stated that its lithium and oil businesses are planned to coexist and complement each other.

Exxon highlighted it is actively engaging in lithium supply agreements with many potential customers. This week, it signed a preliminary agreement to supply lithium from a deposit it is developing in Arkansas to South Korean battery manufacturer SK On Co. “What we have observed is a consistent theme from customer interactions—they value what Exxon Mobil offers in the lithium sector—a stable presence in an otherwise volatile and unpredictable market,” Howarth noted.

Global demand for battery lithium is forecast to reach nearly 3.5Mt by 2035, according to BloombergNEF's Electric Vehicle Outlook 2024 report. This forecast represents a near tripling of 2024 demand levels. The increase in demand is primarily driven by the rapid expansion of the EV market and the growing adoption of renewable energy storage solutions.