Exxon Mobil, the largest U.S. oil and gas company, is pushing further into the electric vehicle business with an acquisition it says will help it produce graphite, an important battery ingredient, by the end of the decade.
Under the deal, announced Tuesday, the oil giant will buy a production facility, research center and other assets from Superior Graphite, a privately held Chicago company, for an undisclosed price.
It is the latest in a series of small bets Exxon is making to produce the materials needed to power electric cars and trucks and help balance supply and demand of energy on the power grids. The company is also working to extract lithium from underground brine in southwest Arkansas.
“Like in any market, there are fluctuations in the near term,” Dave Andrew, Exxon’s vice president of new market development, said in an interview with The New York Times. “But we fundamentally see the demand for batteries and electric vehicles and, increasingly, in large-scale energy storage solutions, increasing over the longer term.”
Exxon is investing at a difficult time for the U.S. battery business. The challenges include lower-than-expected demand for electric vehicles, higher tariffs on imported materials and the end, next month, of a $7,500 federal tax credit available for the purchase or lease of battery-powered cars.
The oil company is aiming to start commercial-scale production in 2029, Mr. Andrew said.
There are two main categories of graphite, a soft, dark gray form of carbon that typically makes up one half of a lithium-ion battery: mined graphite and its manufactured cousin, synthetic graphite. Exxon plans to make the latter.
Exxon’s chief executive, Darren Woods, has said company’s proprietary technology could enable batteries to charge more quickly, while improving how far a car can be driven on a full charge by 30 percent.
Graphite is attractive partly because China produces or processes nearly all of the material that is used in batteries. U.S. companies have strong political and financial incentives to develop domestic supplies of the material.
“We have good indications that what we’re bringing to the market in terms of differentiated material and scalable investments is something that, quite frankly, the U.S. domestic supply chain is looking for,” Mr. Andrew said.
Of course, it is unclear whether the oil giant will see its plans through to fruition. An Exxon scientist notably developed the first working lithium-ion battery in the 1970s — and later shared a Nobel Prize for that work. But Exxon’s interest in the technology faded as management worried the market was too small.
Exxon has also been looking to branch out into areas such as generating power for data centers that it says complement its existing business.
But some of its plans for such new businesses have been delayed. At one point, Exxon aimed to start producing lithium in 2027, but that has moved to 2028.
“We’re continuing to work the lithium technology piece of the equation, very focused on getting that cost down,” Mr. Woods said in August, during the company’s second-quarter earnings call. “That may take longer than we had anticipated.”
Rebecca F. Elliott covers energy for The Times.
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