Chinese firm to build Algeria’s first EV factory

From the newsletter

Chinese electric vehicle company SFE Electric Car Manufacturing Group is planning to build Algeria’s first EV factory. The factory's production capacity is expected to range between 50,000 and 200,000 electric cars annually. It will be the first of its kind in Algeria and will produce cars for both domestic market and export.  

• Algeria has near universal access to electricity. It also has one of the cheapest electricity and gas prices in Africa, making it an attractive investment destination. This has made it attract a number of automakers, who are also looking to leverage its proximity to Europe.

• Demand for electric cars in Algeria is growing, especially in major cities such as Algiers. The government, through the national electricity and gas utility Sonelgaz, is leading efforts to expand charging infrastructure to serve the growing number of EV owners. 

More details

• A delegation from SFE toured Algeria last week, where the company’s top officials inspected the proposed property to build the first electric car factory in Algeria. The delegation discussed Naama, a municipality 1,000 km southwest of Algiers, as a potential location for the factory.

• Algeria is attracting increased interest from automakers seeking to take advantage of its cheap energy and proximity to Europe. Stellantis has a manufacturing plant in Tafraoui, where it produces Fiat models, including the Fiat 500 and Fiat Doblò. Renault also has a production plant in Oran, where it produces models like the Sandero.

• SFE’s planned entry into Algeria signifies the growing race by Chinese automakers to make cars in the North African country. Other Chinese carmakers such as Geely, Chery, and JAC are also planning to establish car manufacturing facilities in Algeria. 

• Algeria, which has a population of 46 million people, has more than 6.5 million motor vehicles on its roads. But the country is estimated to have only hundreds of EVs, mainly in major cities such as Algiers, Oran, Constantine, and Annaba. It affords EV companies an opportunity to set up shop in a country where demand for EVs will only grow.

• The North African country also has vast potential for renewable energy, particularly solar. If this resource is well utilised, it can reduce electricity prices further, making Algeria even more attractive for production of EV components and products.

• Where it lacks in EV production, it makes up with manufacturing of charging stations, some of which it exports. SAIEG, a subsidiary of the state-owned Sonelgaz, exported 433 EV charging stations to Italy and Libya in September 2024. Locally, the company has installed these stations in numerous locations, primarily fuel service stations. 

Our take

• SFE’s decision to establish a factory in Algeria highlights the country’s growing strategic importance as a manufacturing hub. With its cheap energy and proximity to Europe, Algeria offers an attractive alternative to Morocco and Egypt, which have stronger automotive sectors. This move is likely to position Algeria as a key player in the EV market in North Africa.

• The factory’s capacity of up to 200,000 vehicles annually is big, comfortably putting it among the largest on the continent. Its construction could spur further investments in infrastructure, such as EV charging stations and batteries, enhancing Algeria’s industrial capabilities. 

• North African countries are currently dominating Africa’s EV space. They are attracting more financing than any other region, and leading European and Asian car manufacturers have either built or announced plans to build EV plants there. This trend is likely to continue into the future as these countries not only have more advanced economies but are also close to Europe, a major motor vehicle market.