Exxon Mobil Plans to Produce Lithium in Arkansas

Exxon Mobil said on Monday that it planned to set up a facility in Arkansas to produce lithium, a critical raw material for electric vehicles, which pose one of the biggest challenges to the company’s oil business.

Coming just a month after Exxon said it would spend $60 billion to buy Pioneer Natural Resources, the announcement signals that the large oil company intends to hedge its big bets on conventional fossil fuels with at least some investments in cleaner forms of energy that are needed to combat climate change.

The announcement does not represent a fundamental shift in corporate strategy, but it is an acknowledgment that battery-powered vehicles will increasingly compete with cars and trucks fueled by gasoline and diesel. It could also open the door for southern Arkansas to emerge as a major source of lithium. Most of the metal today comes from Australia and South America, and much of it is processed in China.

“Electrification is going to be a major component of the energy transition, and we bring highly relevant experience to the production of lithium,” Dan Ammann, president of Exxon Mobil Low Carbon Solutions and a former top executive at General Motors, said in an interview. “We see an opportunity to deploy that will be highly profitable.”

He said the project would “enable the continued reduction of emissions associated with transportation.”

Exxon announced that it would begin lithium production in 2027, with the goal of producing enough metal to supply more than a million electric vehicles a year by 2030. The company did not say how much it would invest in the project, but Mr. Ammann said the company was ready to spend “hundreds of millions” as a start and would look for “more opportunities” to expand lithium production.