HOUSTON - Exxon Mobil Corp (NYSE:XOM). has announced plans to enter the lithium market, a key component in electric vehicle (EV) batteries, with production expected to start in southwest Arkansas by 2027. The company aims to tap into the Smackover formation, recognized as a rich lithium resource in North America.
The initiative underscores Exxon Mobil's strategic move towards capturing a significant portion of the growing market for EV battery materials. The Arkansas mining operation is set to achieve an annual production capacity that could supply lithium for over one million electric vehicles by the year 2030.
Dan Ammann, head of Exxon Mobil's low carbon solutions division, highlighted the company's dedication to environmental stewardship, stating that they are committed to minimizing the ecological footprint of their operations.
Although Exxon Mobil has not released any sales projections for this new venture, news of the upcoming lithium production contributed to a slight uptick in its premarket trading activity today, with shares rising by 0.3%. This development marks a notable diversification for the oil and gas giant as it pivots towards supporting renewable energy technologies.
InvestingPro Insights
Exxon Mobil (XOM) is not just an oil and gas giant, but also a prominent player in the Oil, Gas & Consumable Fuels industry with a history of consistent dividend payments. InvestingPro Tips indicate that the company has maintained its dividend for an impressive 53 consecutive years, and has also raised its dividend for 41 consecutive years. These are strong signs of financial stability and commitment to shareholder returns.
InvestingPro Data further reveals that Exxon Mobil has a substantial market capitalization of 411.15 billion USD. The company's P/E Ratio, as of the last twelve months in Q3 2023, stands at 10.71, suggesting that the stock might be undervalued. Additionally, the company's revenue over the same period was a robust 350.39 billion USD, despite a slight contraction in growth.
The company's decision to enter the lithium market, which is integral to electric vehicle batteries, underscores its ability to adapt and diversify. With analysts predicting the company will be profitable this year, and the fact that it has been profitable over the last twelve months, it's clear that Exxon Mobil is well-positioned for future growth. In total, InvestingPro offers 11 insightful tips about Exxon Mobil, providing valuable guidance for potential investors.
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