Exxon Mobil announced plans to step into lithium production for electric vehicles in the U.S. amid increasing demands for batteries and advanced electronics.
The oil giant is said to start extracting lithium metals from underground brines in the southern US state of Arkansas in 2027. Exxon owns 120,000 acres in the state's Smackover Formation.
The company is set to drill 10,000 feet into the ground into the saltwater reservoirs. Exxon expects the venture to be "a profitable and high-growth business for the long term here."
No specifics were given on how much Exxon plans to invest in the project or when it is considered profitable.
Exxon's transition towards the EV market came after demands for energy transition drives surged over the year.
The International Energy Agency estimated lithium-consumption will greatly increase between until 2040 due to rising need for ion batteries for electric vehicles and energy storage in the future.
Electric Vehicles Trend and Why Are They Here to Stay
Sales for EVs have reached an all-time high in 2022 with 14% of the total 10 million cars being electric.
Demand for modern breeds of cars become more common thanks to environmental issues, availability of models, and improved ranges compared to oil-powered rides.
These factors are expected to continue in the U.S. well until the start of 2030.
Elon Musk's Tesla remains the manufacturer of electric vehicles with the company sending 1,313,851 electric autos worldwide since its foundation.
Exxon Services for Electric Vehicles and Advanced Electronics
The oil conglomerate has started to dip its fingers into the energy industry in 2016 as talks of EVs and hybrid cars become more common amid climate issues.
EEI, the company's venture capital firm in New Jersey, earlier started to invest in solar and nuclear projects among its non-oil ventures.
Exxon aims to supply lithium batteries to over 1 million EVs per year, becoming the leading metal provider before 2020.
Reuters reported that the company will need well over $2 billion capital to supply 50,000 tons of batteries to attain the big dream.
