Global demand for lithium is expected to reach approximately 4 million metric tons annually by 2035, driven by international commitments to achieve 35 percent electrification by that year. This represents a dramatic increase from current consumption levels, which have already grown more than 400 percent during the current decade. The surge in demand reflects the critical role lithium plays in battery production for electric vehicles and energy storage systems.
China currently dominates the global lithium supply chain, controlling an estimated 72 percent of the lithium-ion market and approximately 80 percent of worldwide battery cell production. This concentration of control has raised concerns about supply chain vulnerability and geopolitical risk, particularly as nations seek to reduce dependence on Chinese-controlled resources. The United States, by contrast, produces just over 1 percent of global lithium supplies, with the majority coming from a single facility in Nevada.
A substantial untapped lithium reserve known as the Smackover Formation, located in southern Arkansas and East Texas, is now attracting major investment from both specialized clean energy companies and established oil corporations. Standard Lithium plans to authorize a regional project in the near term, with a pilot phase expected to begin early next year. The company projects the potential to produce over 150,000 tons annually from its holdings alone. Additionally, LG Energy Solution has committed to purchasing 8,000 tons of battery-grade lithium carbonate yearly from the region beginning in 2029.
Major oil companies are also positioning themselves in the formation, with ExxonMobil controlling over 400,000 net acres and planning a pilot project in 2027, while Chevron acquired 125,000 acres in the prior year. However, analysts caution that while the Smackover’s lithium potential is substantial, economic viability remains unproven. Market volatility and the challenge of competing with established global producers present significant hurdles for new operations, though industry observers note these projects operate on multi-decade timelines requiring long-term strategic planning.
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