EV battery maker SK On to buy 100k metric tons of Arkansas lithium from ExxonMobil

EV battery maker SK On has signed a non-binding agreement to buy lithium from ExxonMobil’s first planned extraction project in Arkansas.

Sk On and ExxonMobil’s big lithium deal

Sk On and ExxonMobil signed a non-binding memorandum of understanding (MOU) that has the potential for a multiyear offtake agreement of up to 100,000 metric tons of lithium.

South Korea-headquartered SK On will use the lithium to manufacture EV batteries in the US. It has two battery-making factories in Georgia, and it’s building four more battery factories jointly with automakers. SK On supplies its US-made EV batteries to Hyundai, Volkswagen, and Ford (their BlueOval SK Battery Park image is above).

In November 2023, ExxonMobil announced that it was drilling its first lithium well in southern Arkansas after it acquired rights to 120,000 gross acres of the Smackover Formation, one of North America’s most plentiful lithium resources. 

The Arkansas project will extract lithium from underground saltwater deposits and convert it into battery-grade material onsite. Exxon asserts that this method will produce lithium more efficiently and with fewer environmental impacts than traditional hard rock mining. 

ExxonMobil set a goal in late 2023 to supply lithium for around 1 million EV batteries annually by 2030, and it’s targeting 2027 for first production.

Electrek’s Take

This is good news for the US EV industry and for building a domestic supply chain.

ExxonMobil has a net zero by 2050 plan. However, a significant weakness in the company’s strategy is focusing only on Scope 1 and Scope 2 emissions from its operations and the energy it consumes. The fossil fuel giant’s plan doesn’t address Scope 3 emissions consumers produce using ExxonMobil’s fossil fuel products. Scope 3 emissions often represent the largest share of oil and gas companies’ total carbon footprint.

Out of the five Western oil giants, Exxon is the only company that hasn’t set Scope 3 targets. In fact, sued its climate activist investors to block their Scope 3 target proposal from going to vote at its annual investor meeting.

So ExxonMobil’s pursuit of lithium extraction isn’t because it cares about reducing its emissions. It’s because it’s a good business move, it knows how to extract things from the earth, and it knows the EV revolution isn’t going to slow, so it’s getting on the bandwagon. Hey, whatever it takes.

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