Morocco: The New 'Yangcheng Lake' of EV Globalization?

TRACY MA | 2025/04/19

Recently, discussions around the globalization of electric vehicles (EVs) have surged, yet Africa still barely features in the mainstream narrative. This is understandable—automobile consumption and manufacturing across the continent are still in their infancy, making it hard to compare with booming emerging EV markets like Southeast Asia or Latin America.

However, one African nation—often confused with the European principality of Monaco—may become a pivotal strategic hub for global EV players: Morocco. This article explores Morocco’s unique positioning across market size, energy advantage, location, and competitive landscape.

Still Sitting at the 'Kids Table'

Most fast-growing EV markets share three key characteristics:

A large consumer base with spending power
A mature industrial chain and infrastructure
Rich mineral resources for battery production

China, the U.S., Thailand, Vietnam, and Mexico all meet these criteria. But Morocco? Not quite.

From a consumption standpoint, low economic levels and unstable electricity supply limit demand. As of 2023, Morocco had around 37 million people and 4.3 million registered vehicles. In 2022, it sold only 161,400 new vehicles, of which a mere 5,649 were EVs (despite a 17% growth). South Africa, another front-runner in Africa, sold just 4,674 EVs in the same year.

On production, Morocco makes about 400,000 vehicles annually, compared to South Africa’s 500,000. Algeria and Egypt trail far behind. In total, Africa’s yearly output hovers around 1 million—barely 1.2% of global production, ranking 16th worldwide.

In strict terms, Morocco and the broader African market are not yet players at the global EV table.

But Nature Is 'Feeding' Morocco

So why single out Morocco? Because although it falls short on demand and industrial maturity, it has a standout advantage: mineral resources—specifically, phosphate, a critical material for lithium iron phosphate (LFP) batteries.

There are two main battery chemistries:

NCM (Nickel-Cobalt-Manganese) — high energy density, dominant in foreign markets (60%+)
LFP (Lithium Iron Phosphate) — lower cost, safer, dominant in China (55.6% market share in 2022 per CPCA)

LFP’s cost advantage makes it more appealing to OEMs, especially in China where phosphate resources are abundant, while nickel and cobalt are scarce.

But here’s the kicker: Morocco holds over 70% of the world’s phosphate reserves, far surpassing China’s 4.5%. According to the USGS, Morocco's phosphate rock reserves hit 50 billion tonnes in 2021.

While China leads in production (40%), it faces environmental restrictions and rapid depletion—its phosphate could run out in 40 years. Since 2022, domestic supply tightness has driven up prices, making importing phosphate increasingly necessary, with Morocco as the primary source.

Even Tesla is shifting toward LFP batteries for standard-range models (Model 3/Y). Huachuang Securities forecasts LFP-equipped EVs to reach 30% of the 17 million global EVs sold by 2025. Plus, energy storage and electric two-wheelers are also expanding. Put simply, Morocco is being “chased and fed by fate.”

A New 'Yangcheng Lake' in the Making

CITIC Securities estimates that LFP demand will exceed 2 million tonnes by 2025, up from 130,000 tonnes in 2020—a 73% CAGR. This will thrust Morocco into the global spotlight.

Due to geopolitical constraints, four new 'Yangcheng Lakes'—resource-rich, trade-friendly alternative hubs—have emerged: Korea, Mexico, Vietnam, and Thailand. These regions have rising trade surpluses with the U.S. and deficits with China.

Take Mexico: In 2023, China exported $81.4B to Mexico and imported just $18.7B—a $62.7B surplus. Mexico even surpassed China as the top U.S. exporter.

Morocco fits this pattern.

As a U.S. FTA partner, EVs using Moroccan-made parts can qualify for up to $7,500 U.S. subsidies under the Inflation Reduction Act
With the EU, Moroccan industrial goods are tariff-free, enabling Chinese-made batteries in Morocco to flow freely into Europe
As a AfCFTA signatory, Morocco has preferential access to 44 African economies

In 2023, Morocco’s auto exports hit $14B, its top export category, up 27% YoY. The government expects EVs to comprise 60% of auto exports by 2030, ahead of the EU’s 2035 ICE ban.

In essence, Morocco is Europe’s mini-Turkey—smaller in scale but competitive in location, logistics, and resources.

The Race Has Begun

In March 2024, Morocco announced its first EV battery-focused industrial zone—283 hectares with a $2.3B investment, adjacent to phosphate giant OCP Group.

Already, six Chinese battery firms—BTR, CNGR, Huayou Cobalt, Tinci Materials, Gotion High-Tech, and Yahua Group—have announced plans to build factories in Morocco. These companies will bring advanced tech, build full production lines, and establish a local EV battery ecosystem. According to L’Economiste, by 2030, exports from the EV battery value chain could reach €40B.

Morocco is also wooing broader auto supply chain players:

Qingdao Sentury Tire invested $300M in Tangier to build a 12M-tire-per-year plant
Tax perks: 5-year corporate tax holiday, 20% after; no tariffs or VAT on imports, production, or exports; 15-year business tax exemption

Still, foreign OEM presence is limited:

In 2006, Chinese light trucks from Yuejin, JAC, Hafei gained 10% market share—but faded
Renault and Stellantis now dominate, producing 700,000 vehicles/year for local and export markets
BYD announced plans in 2017 to build an EV plant near Tangier
Tesla has superchargers in Morocco, and its MOSFET chips are assembled near Casablanca (by STMicroelectronics)
A local Moroccan automaker plans to release an HUV (hydrogen vehicle) in 2025

As of 2023:

18 EV brands and 71 models available
600–2,500 charging terminals
250+ automakers and parts suppliers
250,000+ auto industry workers

Morocco aims to raise local auto parts export share from 65% to 80% and scale output to 1 million units by 2025.

Old Problems, New Challenges

Strategically, China should move fast—just as it did with Mexico and Turkey. Policies can change, but supply chain positioning endures.

Domestically, Morocco (and Africa) needs time:

Infrastructure and grid upgrades
Rising incomes and stable policy
Growing consumption base

Tactically, China’s low-cost strategy applies here. Africa is price-sensitive, dominated by used cars—much like early-stage EV markets in the U.S. EV penetration requires incentives and affordability.

Even more vital are new business models:

Rideshare-based EV ownership
Battery leasing and pay-per-charge
Localized functionality and design

The path may resemble Transsion’s African playbook—build with purpose, price, and proximity.

By the time a market becomes “hot,” the first-mover advantage may be lost. While Morocco isn't completely unknown, its strategic relevance—especially for Chinese battery makers—is growing fast.

The Moroccan government is actively pushing green industry and FDI in EVs and renewables. For Chinese EV firms looking to expand globally, now might be the perfect time to bet on Africa’s silent stronghold.