ExxonMobil expects its first lithium production in 2027. By 2030, it aims to produce enough to meet the manufacturing needs of well over a million EVs annually.
As lithium producers deal with setbacks that could delay full-scale production of electric vehicle (EV) batteries in the United States over the next five years, industry experts say key oil industry investments could recharge that emerging sector in 2025.
ExxonMobil and Saudi Aramco, two of the world’s largest oil producers, have recently announced significant long-term investments in the EV supply chain despite President Donald Trump’s
rollback of the previous administration’s EV mandate on Jan. 20.
ExxonMobil, the largest oil producer in the United States, has widely
shared its intention to become a leading producer of lithium, a key component of EV batteries. The Texas oil giant unveiled in early 2023 that it had begun the first phase of drilling for lithium in southwest Arkansas’s Smackover Formation, an area known for holding significant lithium deposits, a December 2024
report by the U.S. Geological Survey shows.
ExxonMobil expects its first lithium production in 2027. By 2030, it aims to produce enough to meet the manufacturing needs of more than a million EVs annually. In the company’s fourth-quarter earnings call on Jan. 31, CEO Darren Woods said the Irving, Texas-based supermajor expects to make significant capital investments in low-carbon industries over the next five years.
“On the hydrogen and lithium fronts, we announced new equity partnerships and offtake agreements that demonstrate the significant market interest these new businesses are generating,” Woods said during the company’s
earnings call.
Michael Collier, a partner at Houston-based accounting and corporate advisory firm Weaver, told The Epoch Times that the Texas oil giant’s “game-changing” entry in the lithium industry comes after ample planning and due diligence.
“ExxonMobil rarely makes mistakes,” said Collier, who worked for the nation’s largest oil company early in his accounting career. “When they make an investment of this magnitude, you know they’ve studied every possible angle.”
Teague Egan, founder and CEO of Austin, Texas-based EnergyX, said ExxonMobil’s investment in the Smackover Formation could transform the development of the domestic EV supply chain. However, he said Arkansas regulators unanimously rejected applications from lithium producers for a 1.82 percent royalty rate in November 2024, postponing any planned commercial development.
Egan said the royalty discussion in Arkansas is critical to U.S. lithium development because landowners, based on oil and gas industry calculations, are asking for a royalty rate of 12.5 percent or higher.
“A royalty of 2 percent to 3 percent on a refined battery grade lithium material is the only way for large conglomerates to make the economics work,” he told the Epoch Times via email. “I hope these negotiations are successful, allowing ExxonMobil’s entry into the lithium sector, which will accelerate domestic production, drive innovation in extraction technologies, and create a more stable and competitive lithium market.”
EnergyX is also involved in another development in Smackover Formation
called Project Lonestar Lithium. That planned $1 billion-plus full-scale lithium manufacturing facility is not yet fully financed. Still, Egan said the Texas startup is in “discussions with many large strategic conglomerates and financial institutions that could easily foot the $1 billion cost.”
“We ... are confident in securing both private and public investment support for this project,” Egan said, noting that EnergyX had already closed on $75 million in Series B financing from strategic institutional partners,
including General Motors and POSCO, who have first rights to the project’s lithium production offtake.
Despite slow progress on key U.S. projects, global demand for lithium is still expected to quadruple by 2030, according to Virginia Klausmeier, CEO of Bay Area-based Sylvatex Inc., a battery materials manufacturing technology firm. During a Zoom interview, Klausmeier told The Epoch Times that the global battery supply chain—from raw materials to refining, production, and recycling—is heavily concentrated in China, creating significant vulnerabilities for U.S. manufacturers.
“This (China) dominance extends beyond lithium and cobalt to include critical processing infrastructure and component manufacturing, leaving the entire value chain exposed to geopolitical disruptions,” Klausmeier said.
She noted that Department of Energy (DOE) policies under President Joe Biden’s national clean energy
blueprint included incentives for EV adoption, subsidies for clean energy technologies, and funding for infrastructure projects—“all of which can help bridge the gap from concept to large-scale production.”
Notwithstanding the possible loss of DOE funding, the Trump administration still plans to strengthen energy supply chains for the United States and its allies. One of those allies includes Saudi Arabia, where Crown Prince Mohammed bin Salman
announced at the White House on Jan. 22 that the kingdom intends to invest $600 billion in the United States during Trump’s second term.
A week earlier, Aramco
announced a lithium joint venture with Ma‘aden, the largest mining and metals company in the Middle East and North Africa. The venture will focus on extracting lithium from high-concentration deposits and advancing cost-effective direct lithium extraction (DLE) technologies, with production potentially commencing by 2027. Aramco and Ma’aden are Saudi Arabia’s state-run national oil and mining companies.
In response to The Epoch Times’ query, Saudi Aramco officials would not comment on their proposed lithium project or U.S. investments.
However, Collier noted in a recent
report that new DLE technologies that extract lithium from brine sources could speed up production and enable quicker access to lithium for EV batteries and other applications. He said ExxonMobil, Aramco, and other companies in the Smackover Formation are all experimenting with DLE pilot projects.
