ExxonMobil and EV battery maker SK On sign MOU regarding U.S. produced Mobil™ Lithium
ExxonMobil (NYSE: XOM) has signed a non-binding memorandum of understanding (MOU) with SK On to potentially supply up to 100,000 metric tons of Mobil™ Lithium for U.S.-based EV battery manufacturing. This agreement aims to boost domestic lithium production and supports energy security, U.S. manufacturing jobs, and reduced carbon emissions. The lithium will come from ExxonMobil's project in Arkansas, which uses Direct Lithium Extraction (DLE) technology. This partnership aligns with ExxonMobil's goal to supply lithium for about one million EV batteries annually by 2030. SK On's U.S. plants, including two in Georgia and four upcoming facilities, are expected to reach an annual production capacity of over 180 GWh post-2025, enough to power approximately 1.7 million EVs.
- ExxonMobil's partnership with SK On may secure a multiyear supply agreement for up to 100,000 metric tons of Mobil™ Lithium.
- The agreement supports U.S. energy security and reduces carbon emissions.
- ExxonMobil's project in Arkansas employs efficient, lower-impact Direct Lithium Extraction (DLE) technology.
- SK On's U.S. battery plants are expected to achieve a 180 GWh annual production capacity post-2025, powering about 1.7 million EVs.
- This collaboration is a step towards ExxonMobil's goal to supply lithium for one million EV batteries annually by 2030.
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The memorandum of understanding (MOU) between ExxonMobil and SK On could have substantial implications for both companies in terms of revenue streams and market positioning. From a financial perspective, securing up to 100,000 metric tons of lithium for EV battery manufacturing is a forward-looking move that aligns with the rising global demand for lithium, estimated to grow sharply in the coming years. ExxonMobil's projected supply for one million EV batteries annually by 2030 provides a long-term growth narrative that may bolster investor confidence, potentially enhancing the company’s stock valuation. The partnership also helps ExxonMobil diversify its revenue sources beyond traditional oil and gas, which is strategic amid a global shift toward renewable energy.
However, it's worth noting that this MOU is non-binding, which means it's not guaranteed to result in a finalized deal. Investors should stay cautious until more concrete agreements are announced. Additionally, while the approach of using Direct Lithium Extraction (DLE) technology is promising, it is still relatively new and must be proven at scale. Any hiccups in this process could pose risks. On the other hand, if successful, this technology could set a new industry standard.
This collaboration between ExxonMobil and SK On signifies a significant step in fortifying the U.S. EV supply chain, a critical factor as the nation aims to boost its production capabilities in electric vehicle technologies. The domestic sourcing of lithium not only enhances energy security but also reduces dependency on foreign raw materials, which have been subject to supply chain disruptions and geopolitical tensions. For retail investors, this presents a strategic opportunity, as companies that can secure stable and efficient supply chains are likely to perform better in the long run.
Furthermore, the emphasis on domestic production supports U.S. manufacturing jobs and aligns with broader governmental goals of reducing carbon emissions, which could result in favorable regulatory conditions for these companies. This positions ExxonMobil and SK On favorably in both the market and regulatory environment, potentially translating to a competitive advantage. However, investors should monitor the execution of this project closely, given its reliance on new extraction technologies and the evolving regulatory landscape around EV batteries.
From a technological standpoint, the use of Direct Lithium Extraction (DLE) technology in the planned Arkansas project presents a groundbreaking shift in how lithium can be sourced more efficiently and with reduced environmental impacts compared to traditional hard rock mining. The DLE technology operates by extracting lithium from underground saltwater deposits, which could significantly lower production costs and environmental footprint, making it a more sustainable option for the growing demand in EV battery production.
This innovative approach not only underscores ExxonMobil's capability in leveraging its existing expertise in subsurface exploration and chemical processing but also sets a precedent for the industry. If this technology proves to be scalable, it could open up new avenues for lithium production globally, potentially making the U.S. a leading player in the EV battery market. However, the scalability and commercial viability of DLE technology are still to be fully demonstrated and any technological challenges could delay the project's benefits.
SK On seeking multiyear supply, up to 100,000 metric tons, of lithium from ExxonMobil for
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Agreement signals demand for domestically sourced Mobil™ Lithium and marks a milestone in building out
U.S. electric vehicle and battery supply chains -
Domestic lithium production contributes to energy security, supports
U.S. manufacturing jobs and reduces carbon emissions
Demand for lithium is forecasted to grow sharply in coming years as it is an essential component for EVs, consumer electronics, energy storage systems, and other clean energy technologies. The planned project will extract lithium from underground saltwater deposits and convert it into battery-grade material onsite in
“The world needs more lithium to support its emissions goals, and we're doing our part to drive solutions forward in the United States,” said Dan Ammann, President of ExxonMobil Low Carbon Solutions. “This collaboration with SK On demonstrates the leading role we play in the growing market for domestically sourced lithium, a market that’s advancing energy security and climate objectives, as well as supporting American manufacturing."
Planned production of Mobil™ Lithium will use ExxonMobil's core capabilities in subsurface exploration, drilling, and chemical processing, offering
In the
“SK On has been working with global partners to secure key battery raw materials in a move to support our growing
About ExxonMobil
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Cautionary Statement
Statements of future events, investments, or partnerships in this release are forward-looking statements. Actual future results, including project plans, partner participation, timing, capacities, and costs could differ materially depending on a number of factors including the ability to execute operational objectives on a timely and successful basis; implementation of government frameworks and permitting for carbon capture and storage, hydrogen, ammonia and other lower-emission technologies; timely completion of construction projects; commercial and consumer interest in lower-emissions opportunities; changes in plans or objectives prior to final funding decisions or project startups; unforeseen technical or operational difficulties; and other factors discussed under the heading Factors Affecting Future Results in the Investors section of our website at www.exxonmobil.com. Any forward-looking statement speaks only as of the date of this press release and the companies named herein disclaim any obligation to update any forward-looking statement.
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