Will Morocco Be at the Forefront of North Africa’s Green Industrial Take-Off?

Introduction

Many analysts expect more investment to flow into Africa from 2025 into 2026 as global interest rates fall and carry trades pick up. With companies looking to diversify away from China, countries like Morocco, Egypt, and South Africa are emerging as attractive options for European and US supply chains.

Investment Thesis

Morocco is evolving from an automotive assembly base into a vertically integrated EV and battery manufacturing hub. Backed by European automakers and Chinese capital, it is emerging as the continent’s most credible bridge between Africa’s resources and Europe’s demand for clean mobility.

Catalysts

Between 2018 and 2021, major global automakers like Renault and Stellantis committed to expanding their manufacturing capacity in Morocco. Since then, the Moroccan government has set an official target to produce 100k+ electric vehicles by the end of 2025, as part of a broader plan to have EVs make up 60% of the country’s car exports by 2030. The goal is ambitious, but it reflects how quickly Morocco is trying to shift its auto industry toward electric production and become a key supplier to Europe (MoroccoWorldNews, 2025).

$6.5 Billion – Gigafactory Expansion

Africa’s first battery gigafactory is currently underway, with $6.5bn in FDI from Chinese battery manufacturers. The primary source of capital is Gotion High-Tech, a Chinese–European JV, which is funding the central facility that will deliver 20 GWh of capacity by 2026, scaling toward 100 GWh and creating up to 10,000 jobs. This plant is the anchor of Morocco’s emerging battery ecosystem (Reuters, 2025; Moroccan World News, 2025).

Beyond Gotion, Morocco is also receiving large-scale FDI from other Chinese component producers.

BTR New Material Group – up to $3 billion for a cathode plant in Tangier (BTR China, Company Announcement, Dec 2023)
CNGR Advanced Materials – roughly $2 billion for a component base in Jorf Lasfar, often in joint ventures with Morocco’s sovereign fund Al Mada (Saur Energy International, Sept 2023).

These investments mark the second wave of Chinese capital into Morocco, aimed at building the complete battery supply chain, rather than just assembly. They fall under the 2016 China-Morocco strategic partnership, which supports the creation of an integrated EV ecosystem and gives Chinese firms tariff-free access to Europe. In return, Morocco offers tax incentives, land subsidies, training support, and significant infrastructure backing to secure long-term commitments.

This EV push is backed by major government support. The country plans to install around 2,500 new public charging stations by 2026, doubling the current network and making it easier for drivers and companies to switch to electric vehicles. On top of this, the government is offering subsidies, tax breaks, and equipment incentives to reduce the cost of installing chargers and operating electric fleets, helping both consumers and businesses adopt EVs faster.

At the same time, Morocco is investing heavily in cheap, clean energy. The goal is for 52% of the country’s electricity to come from renewables by 2030, one of the most substantial commitments in the region.

New solar and wind projects, including major Sahara-linked transmission lines, will supply automakers and battery factories with low-cost, reliable green energy, cutting production costs and supporting Morocco’s long-term competitiveness in the EV and battery industry.

Structural Factors

Morocco’s labour market is one of their biggest competitive advantages, but also a growing structural risk as the EV ecosystem becomes more complex.

The strengths that support export growth are:

Ultra-low labour costs: Morocco remains one of the world’s cheapest automotive manufacturing bases globally, with labour costs significantly lower than Europe, Mexico, or China.
Large, young workforce: Especially near major auto clusters (Tangier, Kenitra).
Purpose-built training centres (IFMIA): Ensures a steady supply of workers for assembly and components.

The shift from basic assembly to EV and battery manufacturing, requires specialised skills (electrochemistry, automation engineering etc.), Morocco does not yet have enough skilled workers to meet this demand.

Risks

The single biggest existential threat is Morocco being used as a loophole in the China-West trade war. Chinese battery and EV component manufacturers (Gotion, CNGR, BTR) are investing billions in Morocco primarily to gain tariff free access to the EU, and potentially qualify for subsidies under the US inflation reduction act (IRA). If the EU, or US determine that this investment is a loophole to circumvent tariffs without sufficient domestic value creation, they could impose new secondary tariffs on Moroccan-made EVs and components, and therefore render this whole thesis redundant.

Additionally, another significant commercial risk lies in the heavy reliance on the EU market, which accounts for over 90% of vehicle exports. This concentration makes Morocco vulnerable to an economic slowdown in Europe, weaker EV demand, or a surge of cheaper Chinese EVs directly competing in the same market (Morocco Exports by Country, Trading Economics, 2023).

Our View

Morocco’s EV shift is still early, but the direction of travel is clear: more production, foreign investment and stronger government backing. Morocco has demonstrated a strong track record of executing on its industrial ambitions, lending credibility to its current EV and green energy targets. Automotive output has scaled dramatically from ~40-60k vehicles in 2010 to roughly 560k units in 2024, putting it in the global top-25. Furthermore, under the 2014-2020 Industrial Acceleration Plan, the country exceeded its job creation target, creating over 700,000 industrial jobs, and achieved a 60% local integration rate in the auto sector. This historical success in building a substantial auto industry from scratch demonstrates a proven ability to attract investment, develop infrastructure, and meet core manufacturing objectives. (Ibold, GIZ, 2024; World Economic Magazine, March 2024)

Though most of this is already priced in, the clearest beneficiaries are Renault (RNO) and Stellantis (STLAM). Both have primary Moroccan operations, and Renault’s recent $1.5bn upgrade in October 2025 directly ties into the country’s EV-production targets. If Morocco hits its goal of producing 100k+ EVs annually, these two manufacturers stand to benefit the most from increased output, cheaper local batteries, and stronger export links to Europe.

While the high exposure to European demand is a key vulnerability, the balance of catalysts still supports a positive outlook for Morocco exposed automakers as long as Europe continues its push toward electrification.