ExxonMobil (NYSE: XOM) has signed a non-binding memorandum of understanding (MOU) with SK On, a global leading electric vehicle (EV) battery developer, that opens the door to secure a multiyear offtake agreement of up to 100,000 metric tons of Mobil™ Lithium from the company’s first planned project in Arkansas. SK On plans to use the lithium in its EV battery manufacturing operations in the U.S. This will contribute to ExxonMobil’s goal, announced in late 2023, of supplying lithium for about one million EV batteries annually by 2030 and support the build out of a U.S. EV supply chain.

Demand for lithium is forecasted to grow sharply in coming years as it is an essential component for EVs, consumer electronics, energy storage systems, and other clean energy technologies. The planned project will extract lithium from underground saltwater deposits and convert it into battery-grade material onsite in Arkansas. This approach aims to produce lithium more efficiently and with fewer environmental impacts than traditional hard rock mining.

“The world needs more lithium to support its emissions goals, and we’re doing our part to drive solutions forward in the United States,” said Dan Ammann, President of ExxonMobil Low Carbon Solutions. “This collaboration with SK On demonstrates the leading role we play in the growing market for domestically sourced lithium, a market that’s advancing energy security and climate objectives, as well as supporting American manufacturing.

“Planned production of Mobil™ Lithium will use ExxonMobil’s core capabilities in subsurface exploration, drilling, and chemical processing, offering U.S. EV battery manufacturers a more secure, lower-carbon lithium supply option. Through the appraisal drilling program and technology pilot using Direct Lithium Extraction (DLE) technology, ExxonMobil has successfully produced lithium carbonate from the Smackover formation in southern Arkansas.

In the U.S., SK On currently operates two battery plants in Commerce, Georgia, and is building four more plants through joint ventures with Ford Motor Co. and Hyundai Motor Group. After 2025, the annual production capacity of SK On in the U.S. alone is expected to reach more than 180 GWh, which is enough to power about 1.7 million EVs a year.

“SK On has been working with global partners to secure key battery raw materials in a move to support our growing U.S. manufacturing base and lead electrification in the region,” said Park Jong-jin, Executive Vice President of Strategic Procurement at SK On. “Through this partnership with ExxonMobil, we will continue strengthening battery supply chains in the U.S.”