When all you have is a hammer everything looks like a nail. When all you have is a drill, well, let’s just say I’m not surprised at ExxonMobil’s announcement that it plans to drill for lithium in Arkansas. It’s an easy joke to make, but before you roll your eyes I’d like to point out that it was an ExxonMobil scientist who basically invented the lithium-ion rechargeable battery in pretty much every non-Changli electric car out there.
While Exxon using a “drill, baby drill” technique to extract lithium from the ground may not surprise you, the fact that Ford’s Louisville plant voted against the tentative UAW deal might. What’s going on here?
It’s already mid-November and we’ve got at least one more Q3 financial report to look at and it’s Fisker. Would you be surprised to hear that it’s not great? Ok, good, because it’s not great. What might be great is the slight dip in new car transaction prices. I gotta flight to catch, so let’s get this Morning Dump squeezed out.
Drill, Baby, Drill… For Lithium?
Growing up in Houston, it seemed like everyone I knew was either actively working in the energy sector, had worked in the energy sector, or was trying to get a job in the energy sector. Companies like Shell, Enron, Schlumberger, Halliburton. My dad, at one point, sold explosion-proof boxes used for undersea applications.
There wasn’t a lot of talk of batteries, even though an Exxon scientist named Dr. M. Stanley Whittingham actually came up with the technology in the 1970s (and was awarded a Nobel Prize for it a few years ago).
These days, BP is ordering Tesla superchargers and good old ExxonMobile is going to drill for lithium in Arkansas. “How do you drill for Lithium?” you might ask. I’ll let the company explain:
After using conventional oil and gas drilling methods to access lithium-rich saltwater from reservoirs about 10,000 feet underground, ExxonMobil will utilize direct lithium extraction (DLE) technology to separate lithium from the saltwater. The lithium will then be converted onsite to battery-grade material. The remaining saltwater will be re-injected into the underground reservoirs. The DLE process produces fewer carbon emissions than hard rock mining and requires significantly less land.
I remember when fracking was allegedly going to be a more environmentally friendly way to get oil, so I’m definitely in the wait-and-see camp here, but this does seem to work without requiring the massive brine pools that are utilized by more traditional methods. So that’s something.
The guy in charge of all of this is actually Dan Ammann, the Kiwi businessman who came in as treasurer after the GM bankruptcy and worked his way up to becoming CEO of Cruise (a job he’s probably happy he doesn’t have anymore).
Here’s his pitch:
“This project is a win-win-win,” Ammann added. “It’s a perfect example of how ExxonMobil can enhance North American energy security, expand supplies of a critical industrial material, and enable the continued reduction of emissions associated with transportation, which is essential to meeting society’s net-zero goals.”
More domestic lithium production is good. More environmentally sustainable lithium production is also good. If ExxonMobile can use its traditional skill set to meet its goal of producing enough lithium to power a million batteries then that’s good news. Just think of it as that movie “The Cutting Edge” and ExxonMobile is the hockey player, and… the environment is Moira Kelly I guess?
UAW Voters, Like Actual Voters, Don’t Show Up
You might be alarmed to see headlines about large GM and Ford plants voting against the hard-fought tentative deals. What’s going on here? Most likely, this is a case of labor voters acting like all other voters.
Here’s a great quote from local Kentucky CBS affiliate WKLY on the narrow failure of the deal at the local Ford plant:
UAW Local 862 president Todd Dunn believes the historic nature of the contract may have played a role in the low turnout.
“I heard more, ‘Man, this is so good a contract. I’m not worried about it. It’s going to pass.’ There was a lot of members that just felt comfortable and relaxed and just didn’t come out and vote,” Dunn said.
That does seem to be what’s likely going on here and, historically, the Kentucky plant has voted against many of the UAW’s contracts. For all the vigor of the strike, old habits die hard. Most people expect the deal to still pass easily nationwide.
Fisker is… Eh… Fiskering
I’m hoping that Fisker does get to build all the cars that it wants to build because it has some interesting ideas. First, it has to figure out how to build cars at all.
Here’s a pretty brutal opening from Automotive News today on the company’s problems:
Fisker Inc. slashed its 2023 production forecast in a downbeat third-quarter earnings report, as the electric vehicle startup struggled to deliver its recently launched Ocean crossover to customers due to logistics failures.
The California-based automaker now estimates production at between 13,000 and 17,000 vehicles this year from 20,000 to 23,000 previously.
“We have not been able to follow through with deliveries fast enough,” CEO Henrik Fisker said on the earnings call Monday. “People have paid and are waiting for their cars, and some of them are getting really annoyed.”
Average Transaction Price Drops Again, Slowly
The ATP (Average Transaction Price) of new cars has dropped again according to Cox Automotive, reaching $47,936.
Only three vehicle segments had average transaction prices below $30,000 in October – compact cars, subcompact cars and subcompact SUVs/crossovers – and, as noted in earlier reports, the number of new vehicles transacting on average below $20,000 remains at two, the Kia Rio and Mitsubishi Mirage. Both vehicles will be discontinued in the coming years.
So, yeah, not great news, but not terrible news.
The Big Question
Can ExxonMobile make this work? Is this greenwashing or is this real?