BAKU, Azerbaijan, June 25. ExxonMobil has entered a non-binding memorandum of understanding (MOU) with SK On, a prominent electric vehicle (EV) battery developer, setting the stage for a potential multiyear offtake agreement, Trend reports.
The agreement, valued at up to 100,000 metric tons of Mobil Lithium from ExxonMobil’s upcoming Arkansas project, aims to support SK On's U.S.-based EV battery manufacturing operations.
This collaboration aligns with ExxonMobil's strategic goal, announced in late 2023, to provide lithium for approximately one million EV batteries annually by 2030. It also seeks to bolster the development of a robust U.S. EV supply chain.
Lithium demand is projected to surge in the coming years, driven by its critical role in EVs, consumer electronics, energy storage systems, and other clean energy technologies. ExxonMobil's planned project in Arkansas will extract lithium from underground saltwater deposits and convert it into battery-grade material onsite. This method promises greater efficiency and fewer environmental impacts compared to traditional hard rock mining.
Dan Ammann, President of ExxonMobil Low Carbon Solutions, emphasized the significance of the initiative: "The global push for emissions reduction demands increased lithium supply, and ExxonMobil is proud to contribute solutions within the United States. Our partnership with SK On underscores our leadership in domestically sourced lithium, supporting energy security, climate goals, and American manufacturing."
ExxonMobil plans to leverage its expertise in subsurface exploration, drilling, and chemical processing to produce Mobil™ Lithium. This will provide U.S.-based EV battery manufacturers with a secure, lower-carbon supply option. The company has already achieved successful lithium carbonate production from the Smackover formation in southern Arkansas through an appraisal drilling program and technology pilot utilizing Direct Lithium Extraction (DLE) technology.
SK On, which currently operates two battery plants in Commerce, Georgia, and is expanding through partnerships with Ford Motor Co. and Hyundai Motor Group, anticipates scaling its U.S. production capacity to over 180 GWh annually by 2025. This capacity is sufficient to power approximately 1.7 million EVs each year.
Park Jong-jin, Executive Vice President of Strategic Procurement at SK On, affirmed the strategic importance of the collaboration: "SK On is committed to securing critical battery raw materials and bolstering our U.S. manufacturing footprint to lead the electrification drive. Our partnership with ExxonMobil will strengthen the EV battery supply chain in the U.S., reinforcing our commitment to sustainable growth."
The MoU between ExxonMobil and SK On marks a pivotal step towards enhancing lithium supply chain resilience and advancing sustainable mobility solutions in the United States.