ExxonMobil has announced plans to become a leading supplier of lithium for electric vehicle (EV) batteries by the end of the decade. Dubbed “white gold” for its increasing value and silver-white color, the oil company’s investment in this critical mineral comes as demand for it is expected to grow exponentially, nearly doubling over the next five years according to some estimates.
“Everyone’s focused on lithium, it’s white gold is the next rush,” said Keith Phillips, CEO of Piedmont Lithium. “I think we’re in a transitional environment right now where lithium demand will exceed supply most of the time for the next decade or so.”
Earlier this year, ExxonMobil acquired the rights to 120,000 gross acres of land in southern Arkansas’s Smackover formation. The region is considered “one of the most prolific lithium resources of its type in North America.” In total, about 4 million tons of this highly valued metal are estimated to be the area, enough to power about 50 million EVs.
“Arkansas sits on one of the world’s largest lithium resources,” said Robert Mintak, CEO of Standard Lithium. “There’s no better place to build a lithium business than south Arkansas.”
ExxonMobil plans to begin producing battery grade versions of the metal from this site by 2027. Ultimately, its aim is to supply enough lithium to support the production of more than 1 million electric vehicles annually by 2030. Currently, less than one percent of lithium is produced in the United States, leaving American automakers in need of an increased domestic supply of the mineral.
“Lithium is essential to the energy transition, and ExxonMobil has a leading role to play in paving the way for electrification,” said Dan Ammann, president of ExxonMobil Low Carbon Solutions. “This landmark project applies decades of ExxonMobil expertise to unlock vast supplies of North American lithium.”
While ExxonMobil moves forward with their plans to become a major lithium supplier, other Big Oil players are also making investments in electric vehicles, from chargers to battery technology and car manufacturing. Chevron has explored funding lithium mining efforts, CEO Mike Wirth confirmed to Axios.
“If battery electric vehicles do prove to be the major means of light passenger vehicle transportation moving forward, the core business model for the oil majors of providing gasoline to these vehicles is going to struggle,” said Graham Evans, director of auto supply chain and technology at S&P Global Mobility. “It’s not necessarily just hedging their bets, but perhaps starting to add some meat on the bone of the narrative around decarbonizing what they do, and meeting some kind of net-zero target for the future, as difficult as that will be to achieve.”
BP announced last month it would purchase $100 million worth of Tesla superchargers and is gearing up to spend $1 billion on charging infrastructure by 2030. BP has already installed over 20,000 EV charge points worldwide, with a goal of rolling out more than 100,000 over the next six years.
Shell is also creating its own network of EV charging stations, currently operating 140,000 worldwide. In March, the company purchased charging provider Volta for $169 million. Shell plans to operate over 500,000 charge points around the world by 2025 and upwards of 2.5 million by 2030.
Meanwhile, oil refining giant Koch Industries put at least $750 million towards EVs and the U.S. battery supply chain in 2022. That spending made them one of the biggest investors in the sector outside of automakers at the time, according to The Wall Street Journal.
A projected surge in the demand for EVs has prompted this shift in strategy from Big Oil companies. With some analysts protecting that electric vehicles could surpass as much as two thirds of global car sales by 2030, the oil industry is looking at ways to be a part of the anticipated widespread adoption of these vehicles in the coming years.
