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Morocco in drive to become a global EV manufacturing hub

PIF has launched Tasaru Mobility Investments to accelerate EV development in Saudi Arabia Unsplash.com/Andrew Roberts
Abu Dhabi is developing a multi-modal cluster to accelerate the deployment of smart and autonomous vehicles across air, land and sea
  • Minister of industry described proposed facility as ‘gigafactory’
  • Country rich in cobalt, fluorine and phosphate used in batteries
  • Government reducing import duties to support growth

Ask anyone to name the global electric vehicle manufacturing powerhouses and the US and China are the first countries that will spring to mind. 

But Morocco now looks set to join the big league after its government announced in July that it is planning to ink a deal with several EV battery manufacturers to construct a huge production facility in the kingdom by the end of this year.

Morocco’s minister of industry Ryad Mezzour described the proposed facility as a “gigafactory” – a term that has become synonymous with Tesla’s $2 billion production plant in Shanghai that was built to manufacture 500,000 EV batteries each year.

However, he declined to identify the manufacturers or the total capacity of the proposed site.

Morocco is ripe to harness the enormous growth opportunities that the global EV industry presents. The country is home to many of the materials critical for the manufacturing of batteries, such as cobalt, fluorine and phosphate.

In 2020 the kingdom’s cobalt exports totalled $84 million, positioning it as the world’s 13th largest exporter. 

It also has over 70 percent of global phosphate rock reserves and is currently the world’s second-largest phosphate producer, after China. 

This gives Morocco a competitive advantage in future EV battery production, as lithium iron phosphate (LFP) batteries are increasingly being used as they are cheaper, safer and last longer than their cobalt-based counterparts.

Today, demand for electric batteries is growing both outside and within Morocco, where Citroen plans to double its production capacity in Kenitra, in the north-west of the country, from 50,000 supermini electric cars within two years.

Morocco is already a leading car manufacturing hub with the capacity to produce more than 700,000 vehicles per year, employing about 220,000 people in the sector. It is now targeting manufacturing one million cars within the next three to four years. 

“The key to Morocco’s rise as a green mobility manufacturing giant will be expanding its automotive ecosystem to include local manufacture of Li-ion batteries, which represent 30 to 40 percent of the cost of the average EV,” Professor Michaël Tanchum, a non-resident fellow with the Middle East Institute’s Economics and Energy Program, said in a report published last month entitled ‘Morocco’s green mobility revolution’.

“The new gigafactory could thus accommodate producing the targeted additional 300,000 vehicles as EVs.” 

PSA Groupe
Citreon is doubling its production capacity of supermini EVs in Kenitra, north-west Morocco, within two years

Supportive legislation and local advantages

In anticipation of this future growth, the Moroccan government has begun introducing supportive legislation.   

In November 2021 Rabat unveiled its public finance bill (PLF) for 2022 which proposed a reduction of the import duty on lithium-ion cells from 40 percent to 17.5 percent, in order to encourage the establishment of a national lithium-ion battery assembly using cells imported from Asia.  

Morocco also looks set to benefit from the prioritisation of local supply chains triggered by the Covid pandemic – giving it a clear advantage over the US or China.  

“As Europe is looking for partners to help it ramp up EV production within short distances, Morocco is certainly a good potential partner,” Philippe Vangeel, secretary-general at the European Association for Electromobility, told AGBI. 

“Classic challenges remain, such as permitting permissions for mining, which can delay projects, but many elements are there to achieve a positive outcome.”

No doubt helped by its geographical proximity, as of 2021 Morocco ranked as the second-largest exporter of cars to Europe. It is also the leading car manufacturer on the African continent after overtaking South Africa in 2017.  

The European Commission’s July 2021 directive to phase out all fossil fuel-powered vehicles in the EU by 2035 will help accelerate future EV sales growth. 

One in every 11 cars sold in the EU last year was fully electric, equating to a 9.1 percent market share – up from 1.9 percent in 2019 – according to data from the European Automobile Manufacturers’ Association. 

Speaking to Moroccan media last month, Mezzour acknowledged the need to prioritise EV manufacturing. “Morocco has no choice, because 90 percent of our automotive exports go to Europe, and Europe has decided to switch to all-electric by 2035,” he said. 

The European EV market was valued at $25.489 billion in 2019 and is projected to reach $143.084 billion by 2027, registering a compound annual growth rate of 25.4 percent, according to Allied Market Research. 

Such predictions will no doubt further help place Morocco firmly in the driving seat when it comes to the future growth of the global EV market.

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