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MagyarTesla in talks with Exxon on lithium supply enough for 50 million EVs
As oil companies are looking to diversify into electric vehicle battery materials extraction, Exxon Mobil is now probing customers for its giant lithium deposit finding in Arkansas. It has allegedly approached Tesla and others with a lithium supply offer that could see it extract and deliver up to 100,000 tons per year in a more environmentally friendly way.
For Tesla, which is building a battery-grade lithium refinery on the Gulf Coast, this could be a good deal as it will help it qualify for the full US$7,500 federal subsidy per new EV. The government's requirements are that a certain percentage of the raw cell materials and pack assembly come from the US. That percentage rises every year until 2032 when the subsidy expires, so getting lithium for the Cybertruck's 4680 battery from Exxon and refining it in Texas could theoretically make Tesla eligible for more federal money.
The plot in Arkansas that Exxon Mobil is exploring may contain a huge amount of lithium enough to build battery packs for 50 million electric cars. Moreover, Exxon argues that its extraction could happen in a more environmentally sustainable way than current lithium deposit developments, as the metal will be derived from underground saltwater.
According to Exxon's CEO Darren Woods at the company's last quarterly call, dealing with "brine and extracting the lithium is very consistent with a lot of the things that we do in our refineries and chemical plants and, in fact, in some of our upstream operations." Exxon is now mulling whether to drill the extraction wells in the field where it has already invested US$100 million for exploration with partners, or go it alone.
As lithium prices dropped significantly this year, Exxon may have decided to extract it with partners, as it has reportedly approached other EV industry stalwarts besides Tesla, such as Ford and VW, as well as their battery suppliers from Samsung and SK On.
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