Chevron’s Interest in Lithium Production
Chevron Corp., one of the world’s leading oil and gas groups, is contemplating opportunities for lithium production for electric vehicle (EV) batteries. This move aligns with Chevron’s core capabilities as an experienced oil and gas producer. CEO Mike Wirth mentioned in a Bloomberg interview that extracting lithium could be a potential adjacency to their business. However, no specific plans were disclosed.
The Strategic Shift in Energy Transition
This interest in lithium production follows a similar announcement by Exxon Mobil Corp. CEO Darren Woods in July, indicating a strategic shift in the energy transition. The availability and cost of lithium greatly impact the scalability of EVs, making it a crucial area of interest for these energy giants.
Interestingly, the approach of US oil majors contrasts with their European counterparts. European companies have been more aggressive in certain energy-transition sectors like wind, solar, and power services. In contrast, US companies have focused on areas adjacent to their fossil fuel operations, such as carbon capture and storage, hydrogen, and now lithium.
Chevron’s Stance on Wind and Solar Projects
Chevron has been clear about its position on large-scale wind and solar projects, stating that the returns are low and competition is high. The company prefers to concentrate on its core business, which includes exploring potential ventures in lithium production.
Chevron’s Recent Performance and Future Plans
In addition to its lithium plans, Chevron recently reported better-than-expected earnings. The company’s output in the Permian Basin reached a record high, contributing to its positive results. Furthermore, Chevron announced the waiving of the mandatory retirement age of 65 for CEO Mike Wirth. As a result of these developments, Chevron’s shares rose in early-morning New York trading.
Overall, Chevron’s consideration of lithium production for EV batteries reflects the growing importance of lithium in the electric vehicle industry. With its strategic focus and recent positive performance, Chevron is positioning itself to be a significant player in the evolving energy landscape.