Oil giant ExxonMobil is making a foray into electric vehicle batteries, saying it will extract lithium from water in Arkansas.
The $100 million Exxon reportedly put into leasing the area where it plans to get the lithium is miniscule, however, compared to its recent $60 billion acquisition of oil company Pioneer Natural Resources.
The company isn’t straying from oil anytime soon. But the investment in nonfossil energy is a rare one for Exxon. The company had previously invested in but later pulled funding from an effort to make biofuel from algae.
“It’s a drop in the bucket for them,” said Mona Dajani, global head of renewables, energy and infrastructure at the law firm Shearman & Sterling. Dajani represents oil majors and renewable companies but declined to say whether she had ever represented Exxon.
But, she said, “it’s signaling that they’re recognizing that there’s opportunity here” adding that it’s also a way for the company to diversify.
In a press release on Monday, Exxon said it will separate lithium from saltwater in a 120,000 acre area of southwest Arkansas.
It said it hopes to begin producing lithium in 2027 and by 2030 hopes to be able to supply the needs of more than a million electric vehicles each year.
Most electric vehicles are powered by lithium-ion batteries.