China Turns to Morocco to Establish Major Electric Battery Hub

Marrakech – Chinese companies are betting on Morocco as a logistics center to produce and export electric car batteries to Europe, Africa, and the Americas, taking advantage of its geographical location, trade agreements, resources, and an already existing automotive ecosystem in the Maghreb country.

The announcement last week that the Chinese group Gotion High-Tech will open a battery gigafactory in Morocco is the latest in a series of at least six companies from the Asian giant that will install factories related to this product, supported by the Moroccan government, which is committed to making the country a benchmark in this field.

This news comes after two years of tightening commercial relations between the two countries, at a time when Morocco’s automotive industry produces 700,000 cars annually for Stellantis and Renault, and seeks to transform from thermal to electric engines to meet European demand.

“Morocco is making a very strong commitment to the electric vehicle sector,” Hicham Chaoudri, Investment Director of the Ministry of Investment and Evaluation of Public Policies, told EFE, recalling that it is the first non-EU country to export cars to the EU.

According to Chaoudri, Morocco wants to move towards the production of electric motors and has turned to China because “they are the world leaders” in the sector.

In 2016, King Mohammed VI visited Beijing and consolidated the bilateral relationship, and in January 2022, the foreign ministers of the two countries signed an agreement within the framework of the Chinese “New Silk Roads” project to facilitate the establishment of Chinese companies.

In April 2023, Moroccan Investment Minister Mouhcin Jazouli made a tour of China, and since then there has been a trickle of projects with investments of at least 2.45 billion euros in the Maghreb country.

The most substantial is the recently announced Gotion, which will invest almost 1.2 billion euros in its factory in Kenitra (north of Rabat), where there is already an automotive ecosystem around the Stellantis plant.

A little further north, in the Tangier Tech technological complex (near the Tangier Med mega-port), Hunan Zhongke Shinzoom Technology, which specializes in electromagnetic equipment and anodes for batteries, announced last month that it will install a factory with an investment of 460 million euros and will employ 1,500 people.

In the same industrial zone, the BTR New Material group announced last March that it will invest 278 million euros in another factory to produce 50,000 tons of cathodes per year.

One of the reasons that attracts Chinese investment is Morocco’s resources, where materials such as phosphates (it is one of the world’s leading producers), manganese, and cobalt used in these batteries are extracted.

However, Chaoudri assures that it is not the main one. According to the director, there are five reasons that play a major role, such as the “economic and political stability of the country” and its infrastructures, citing Tangier Med, its highways, and its high-speed train that connects Tangier, Kenitra, and Casablanca.

Also, he says, the “young and qualified workforce”, about fifty free trade agreements – including with the EU and the US – and that the current automotive industry uses “wind and solar energy”.

In addition to the Tangier and Kenitra areas, Chinese companies plan to set up in Casablanca, Morocco’s economic capital, which has a port that wants to expand its influence. Last Thursday, the port authority announced a new freight line, via train and ship, with the Chinese province of Sichuan.

There, the Chinese CNGR together with the Moroccan royal family’s holding company, Al Mada, will build an industrial base for ternary precursors, iron phosphate and lithium, and battery recycling to “meet the growing and strong demand for new energy automobiles in Europe and the United States,” according to the Asian company.

Also in Casablanca, Zhejiang Hailiang plans to install a plant with an investment of 264 million euros to manufacture sheets for lithium batteries and serve its customers in Europe, America, the Middle East, and Africa, Bloomberg reported.

A third Chinese company, Tinci Materials, is in talks with the Moroccan government to move its electrolyte project for batteries from the Czech Republic to Casablanca, sources close to the negotiations told EFE.