Exxon Mobil said lithium demand will grow despite a years-long slump in prices, a scenario that would help its traditional oil business co-exist with a foray into producing the battery material that’s key for electric vehicles.

“What we’re seeing right now in lithium is the sentiment is bearish,” Patrick Howarth, Exxon’s lithium global business manager, said in an interview on the sidelines of an industry conference in Las Vegas. “But underlying that is a demand growth story for EVs and the lithium-ion batteries that go into EVs,” he said, adding “we know the world urgently needs significantly more lithium than it’s producing today.”

Exxon’s plans to become one of the biggest suppliers of lithium, its first major foray outside of fossil fuels in decades, have come under increasing scrutiny after prices of the material plunged by more than 80% in 2023 due to a supply glut and slowing demand growth. The key battery material weakened further this month after a temporary rebound, with inventories again piling up.

Exxon is focusing on bringing forward its most competitive lithium projects in the fastest way possible, according to Howarth. The oil giant still plans to have its first project online in 2027, he added, under a strategy announced in November that will see it ramp up output to the equivalent of one-million EVs annually by 2030.

While more EVs are needed amid the world’s transition to clean energy, “it also needs ICE vehicles as well for many years to come,” Howarth said, referring to gasoline-powered cars that increase efficiency through batteries. “So I think our lithium business and oil business can co-exist.”

Overall lithium demand from batteries is expected to reach just under 3.5-million tons in 2035, nearly three times 2024 levels, according to BloombergNEF’s annual Electric Vehicle Outlook 2024.

Exxon signed a preliminary agreement on Tuesday to supply South Korean battery-maker SK On Co. with lithium from a deposit it’s developing in Arkansas, deepening its connections to the EV industry.

Exxon is in “active conversations” with many potential customers about lithium supply deals, Howarth said.

“What we’ve seen is a very consistent theme from the customer interactions that they put value on what Exxon Mobil brings to the lithium space — a safe harbor in a very rocky, very volatile market right now,” he said.