Exxon Mobil remains confident in the growing demand for lithium despite a prolonged slump in prices, a scenario that could enable its traditional oil business to coexist with its new venture into producing the battery material essential for electric vehicles (EVs).
“What we’re seeing right now in lithium is the sentiment is bearish,” Patrick Howarth, Exxon’s global business manager for lithium, said during an industry conference in Las Vegas.
“But underlying that is a demand growth story for EVs and the lithium-ion batteries that go into them,” he added. “We know the world urgently needs significantly more lithium than it’s producing today.”
Exxon’s ambitious plans to become a leading lithium supplier, its first major venture outside fossil fuels in decades, have faced increasing scrutiny after lithium prices plummeted by more than 80% in 2023 due to a supply glut and slowing demand growth.
The key battery material weakened further this month after a temporary rebound, with inventories piling up again.
According to Howarth, Exxon is focusing on accelerating its most competitive lithium projects. The oil giant still plans to have its first project operational by 2027, aiming to ramp up output to supply the equivalent of one million EVs annually by 2030 under a strategy announced in November.
While more EVs are needed amid the global transition to clean energy, “it also needs internal combustion engine (ICE) vehicles as well for many years to come,” Howarth noted, referring to gasoline-powered cars that use batteries to increase efficiency. “So I think our lithium business and oil business can coexist.”
Overall lithium demand from batteries is expected to reach just under 3.5 million tons by 2035, nearly three times the levels projected for 2024, according to BloombergNEF’s annual Electric Vehicle Outlook 2024.
Exxon signed a preliminary agreement on Tuesday to supply South Korean battery-maker SK On Co. with lithium from a deposit it’s developing in Arkansas, strengthening its ties to the EV industry.
Howarth also mentioned that Exxon is in “active conversations” with many potential customers about lithium supply deals.
“What we’ve seen is a very consistent theme from customer interactions that they value what Exxon Mobil brings to the lithium space — a safe harbor in a very rocky, very volatile market right now,” he said.
