Electric Car Battery Maker Inks Lithium Deal with ExxonMobilElectric Car Battery Maker Inks Lithium Deal with ExxonMobil Electric car battery maker SK On has signed a non-binding agreement to purchase lithium from ExxonMobil’s first planned extraction project in Arkansas. The agreement could potentially lead to a multi-year offtake agreement of up to 100,000 tonnes of lithium. SK On’s Lithium Acquisition SK On, based in South Korea, will use the lithium to produce EV batteries in the U.S. The company has two battery factories in Georgia and is building four more battery factories in collaboration with automakers. SK On supplies its U.S.-made EV batteries to Hyundai, Volkswagen, and Ford. ExxonMobil’s Lithium Extraction Project In November 2023, ExxonMobil announced its first lithium well in southern Arkansas, having acquired rights to 120,000 gross acres of the Smackover Formation. The project will extract lithium from underground saltwater deposits and convert it into battery-grade material on site. ExxonMobil claims this method will produce lithium more efficiently and with less environmental impact than traditional hard rock mining. Electrek’s Analysis This deal is seen as a positive development for the U.S. EV industry and the establishment of a domestic supply chain. However, Electrek notes that ExxonMobil’s net-zero plan focuses on reducing Scope 1 and Scope 2 emissions, ignoring the significant Scope 3 emissions produced by consumers using its fossil fuel products.
Image: Ford
Electric car battery maker SK On has signed a non-binding agreement to purchase lithium from ExxonMobil’s first planned extraction project in Arkansas.
Sk On and ExxonMobil’s Major Lithium Deal
Sk On and ExxonMobil have signed a non-binding Memorandum of Understanding (MOU) that has the potential for a multi-year offtake agreement of up to 100,000 tonnes of lithium.
SK On, headquartered in South Korea, will use the lithium to produce EV batteries in the U.S. It has two battery factories in Georgia and is building four more battery factories with automakers. SK On supplies its U.S.-made EV batteries to Hyundai, Volkswagen and Ford (above is its BlueOval SK Battery Park graphic).
In November 2023, ExxonMobil announced it was drilling its first lithium well in southern Arkansas after acquiring rights to 120,000 gross acres of the Smackover Formation, one of North America’s largest lithium resources.
The Arkansas project will extract lithium from underground saltwater deposits and convert it on site into material for batteries. Exxon claims this method will produce lithium more efficiently and with less environmental impact than traditional hard rock mining.
ExxonMobil set a target in late 2023 to supply lithium for about 1 million EV batteries annually by 2030, with initial production targeted for 2027.
Electrek’s Take
This is good news for the US EV industry and for building a domestic supply chain.
ExxonMobil has a net-zero plan by 2050. However, a significant weakness in the company’s strategy is that it focuses only on the Scope 1 and Scope 2 emissions of its operations and the energy it uses. The fossil fuel giant’s plan does not address the Scope 3 emissions that consumers produce using ExxonMobil’s fossil fuel products. Scope 3 emissions often represent the largest portion of oil and gas companies’ total carbon footprint.
Of the five Western oil giants, Exxon is the only company that has not set Scope 3 targets. In fact, the company has sued its climate activist investors to prevent its Scope 3 target from being voted on at the annual investor meeting.
So ExxonMobil’s push into lithium mining isn’t because it wants to reduce its emissions. It’s because it makes good business sense, it knows how to get stuff out of the earth, and it knows the EV revolution isn’t going to slow down, so it’s jumping on the bandwagon. Whatever it takes.
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