China picks Morocco for Europe’s EV battery supply

China is intent on establishing a battery supply chain for the European electric vehicle (EV) market in Morocco, a top Volkswagen executive has said.

The initiative comes as Europe grapples with challenges in establishing its industry to support EV manufacturing.

“We don’t have any supply chain. This has to be set up,” Bloomberg reported, quoting Sebastian Wolf, chief operating officer for Volkswagen’s battery unit.

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He said the lithium-iron-phosphate (LFP) supply chain is being set up in Morocco, not Europe.

Morocco is rich in phosphate resources, which are key to making LFP cells, the report said.  The country is situated close to Europe and benefits from good trade relations with the US.

This month, the Moroccan government and the Chinese-European group Gotion High Tech signed a $1.3 billion deal to build a gigafactory for the manufacture of EV batteries.

The facility will be constructed in Kenitra, in the north-west of the country.

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CNGR Advanced Material, a Chinese manufacturer of battery components, announced in September last year that it would join forces with Al Mada, a conglomerate owned by the Moroccan royal family, to invest MAD20 billion ($2 billion) in the construction of a cathode materials plant.

China’s Zhejiang Huayou Cobalt and South Korean chemical maker LG Chem have previously revealed plans to build a lithium refinery and cathode materials plant in Morocco.

In June 2022 Renault announced an agreement with Managem, a Moroccan mining company, to obtain 5,000 tonnes of low-carbon cobalt sulfate annually, starting from 2025.