Fossil fuel giant Exxon is betting its U.S. lithium operation will power a new generation of electric vehicles.
The U.S. has hundreds of thousands of tons of "recoverable" lithium, which could go to use in batteries for cars, handhelds and renewable energy storage, a 2021 U.S. Geological Survey said. Yet, the country has just one commercial-scale lithium mining site today, in Nevada — run by chemical manufacturer Albemarle.
The Biden administration is pushing for more lithium mines — despite opposition from indigenous and environmental groups — and now Exxon is committing to drill it out of the ground in Arkansas. In doing so, Exxon is potentially challenging Tesla — which is working on extracting lithium from clay in Texas.
Numerous startups are also working on lithium extraction. Lilac Solutions, for example, wants to pull lithium from the Great Salt Lake in Utah. There's also GM-backed EnergyX, which raised $50 million in April to "unlock" lithium in North America.
On Monday, Exxon stated that it aims to start producing lithium in 2027. The company said the "potential customers" it's talking with include electric vehicle and battery makers. By the start of the next decade, Exxon intends to produce "enough lithium to supply the manufacturing needs of well over a million EVs per year."
Exxon executive Dan Ammann told CNBC that the conglomerate wants to "get in early" on domestic lithium mining. Exxon was first to lithium-ion battery production in the 70s, yet it bailed on the business quickly, because it did not see its potential to scale.
Lithium is a crucial component in modern batteries, which in turn power the switch to renewable energy sources and electric vehicles.
Ammann said in a statement that Exxon's direct lithium extraction tech will come with "far fewer environmental impacts than traditional mining operations." However, direct lithium extraction still poses environmental risks, including high freshwater consumption.
More broadly, Argentinian researchers warned in a 2023 paper that ecosystems around "lithium deposits are extremely fragile and linked in a food chain in which ecosystem services are crucial for livestock and rural populations."