Production at Morocco EV battery gigafactory starts June

From the newsletter

A $2 billion EV battery gigafactory built in Morocco, one of the largest in the world, will start production in June. It will produce 120,000 tonnes of cathode components annually(context of time period). A cathode is a critical part of a battery and is where electricity flows out. The factory is a joint venture between Moroccan and Chinese firms. 

• COBCO, the joint venture between Chinese battery manufacturer CNGR Advanced Material Co. and Moroccan holding company Al Mada that is building the factory, is establishing a comprehensive battery materials production platform in Morocco, aimed at supplying the growing EV market.  

• Morocco, strategically located at Europe’s doorstep, is emerging as a serious player in the global EV supply chain. It is, therefore, in a prime position to utilise the battery factory for exports to Europe, where demand for EV batteries is growing, as well as North America and Asia.

More details

• The 200-hectare factory, which is strategically located near the Jorf Lasdar port, will have the capacity to produce 70 gigawatt-hours of energy annually – enough to power over 1 million EVs annually – once all the phases are completed. The initial focus of the factory is to produce Nickel Cobalt Manganese (NCM) precursor cathode active material (PCAM).

• Thereafter, the factory also has plans to produce Lithium Iron Phosphate (LFP) cathode active materials. Additionally, it will include advanced black mass recycling facilities to create a closed loop system.

• The construction of the facility commenced in 2023 after CNGR and Al Mada established the joint venture. The facility began production of nickel-based battery materials, a vital ingredient for lithium-ion batteries.

• Morocco is the only African country with a free trade agreement with the US. This special status has made it a magnet for Chinese companies seeking to evade US tariffs. An increasing number of Chinese companies in numerous sectors, including automotive, chemicals and manufacturing, have set up shop there.

• The North African country is a major producer of nickel, cobalt, and manganese, meaning the raw materials used to make the cathode components are readily available locally. Morocco also has extremely large phosphate reserves, which is why there is also a push for LFP (Lithium Iron Phosphate) battery production. 

• The factory makes Morocco a pioneer in EV battery components in Africa. Currently, African countries import EV batteries, mainly from China. Batteries are the single most expensive component in an EV, forming a large part of its cost. In the long term, production of these batteries in Africa will lower their cost, especially once the cost of factors of production such as energy are reduced.  

Our take

• The North African country should use its technical expertise in making EV batteries to expand production across Africa. The country is already in partnership with Zambia and the DRC to establish a battery factory in Zambia. Such symbiotic relationships will propel Africa’s battery industry. 

• Morocco is the largest exporter of vehicles to Europe, where it is also aiming to supply its batteries. However, European companies have started to lobby for protection against Morocco’s dominance. This could see its exports to Europe limited. It is prudent for Morocco to diversify its market before this happens. 

• Demand for EVs in Africa is growing across all vehicle categories but is rising fastest in the motorcycle segment. EV motorcycle batteries are smaller and have lower capacities compared to batteries for cars, which are larger. African countries that are planning to do battery manufacturing should target the motorcycle segment.