In recent years, LFP batteries have gained significant traction in the Chinese market, with the current market penetration reaching 70%.
Morocco is the world’s largest holder of phosphate reserves, with its largest city, Casablanca, being the world’s largest phosphate export port. According to the U.S. Geological Survey, global proven phosphate reserves were approximately 74 billion tons in 2023, while Morocco held 50 billion tons, accounting for 67.6% of the global reserves.
01 Rich Resources and Widespread Investments
Since 2023, several Chinese lithium battery industry chain companies, including CATL, Gotion High-Tech, Sunwoda, BTR, Huayou Cobalt, CNGR Advanced Material and Tinci Materials, have collectively invested in Morocco and built factories. The battery industry chain centered around LFP is forming rapidly.
In June this year, the Moroccan government announced that Gotion High-Tech would invest $1.3 billion (US) to build a gigafactory for EV batteries. The initial planned production capacity is 20 GWh, with future plans to gradually increase it to 100 GWh, and the total investment is expected to reach $6.5 billion.
CATL is also considering establishing a wholly-owned cathode materials plant in Morocco to supply its battery factories in Germany, Hungary, and other locations. CATL has already planned over 100 GWh of production capacity at its European factories. Additionally, Sunwoda is also setting up a battery production base in Morocco.
The number of material manufacturers investing in Morocco is even larger. In April this year, Zhongke Electric planned to invest about $699 million (US) to implement an integrated base project for producing 100,000 tons/year of anode materials in Morocco. In May, Hailiang Co. planned to invest $288 million (US) to build a new materials industrial park in Morocco, including projects such as producing 25,000 tons/year of lithium battery copper foil.
Moreover, BTR plans to invest up to approximately $494.2 million (US) to build a 50,000-ton annual production project for cathode materials in Morocco. CNGR Advanced Material plans to establish a project in Morocco with an annual production of 120,000 tons of ternary precursors and supporting raw material, as well as 60,000 tons of phosphorus-based materials. Yahua Industrial Group and LG Energy Solution will jointly build a plant in Morocco for the production of lithium hydroxide. Tinci Materials plans a factory in Morocco with an annual production of 300,000 tons of lithium battery materials. Huayou Cobalt and LG Energy Solution will co-build a plant in Morocco, one for 50,000 tons of LFP annually and another for 52,000 tons of lithium conversion annually.
In addition to abundant phosphate reserves, Morocco also possesses metal resources like cobalt and lithium needed for battery production and has cost advantages. Industry estimates suggest that producing lithium batteries in Morocco offers a 36% cost advantage compared to other countries. By 2030, EV exports are expected to account for 60% of Morocco’s total car exports, and the export value of investors in Morocco’s power battery value chain is projected to reach 40 billion euros (approximately $44 billion US).
Currently, European and American automakers are increasing the use of LFP batteries, making Morocco a key hub for their production. With more Chinese manufacturers accelerating their investments, Morocco is poised to become the largest LFP production base outside China.
02 Market Potential
Additionally, Morocco has a highly advantageous geographic location at the crossroads of North Africa, Europe, the Mediterranean, and the Atlantic Ocean. Morocco is separated from Europe by the Strait of Gibraltar, and its closest point is less than 20 kilometers from Spain.
Morocco currently has over 250 companies manufacturing cars and auto parts, with the automotive industry accounting for about 20% of Morocco’s GDP. European automakers such as Renault and Stellantis all have factories there. In 2023, Morocco’s automotive exports reached $13.9 billion (US), surpassing China, India, and Japan to become one of the EU’s main automotive suppliers.
As the European automotive market accelerates its shift towards electrification, the demand for localized power battery supply is growing stronger. Local environmental regulations, however, can be a hindrance. Morocco’s proximity to Europe means that building factories there is almost equivalent to building factories in Europe. As stated by PowerCo, “China is building a battery supply chain for Europe in Morocco.”
Besides, industry experts note that Morocco has free trade agreements with both the US and the EU, allowing exports to enter these markets duty-free. And Morocco is the only African country eligible for subsidies under the US IRA, which includes a $3,750 tax credit related to key battery minerals.
“As companies seek to mitigate risks related to geopolitical tensions and trade barriers, regional hubs like Morocco become increasingly important,” an expert from Morocco’s Ministry of Industry and Trade pointed out.
Source: WeChat Official Account—电池中国
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