China Builds Battery Supply Chain in Morocco to Fuel Europe’s EV Industry

China is building a battery supply chain for Europe in Morocco, as the continent struggles to develop its own industry to supply the manufacture of electric vehicles, revealed Sebastian Wolf, head of operations at PowerCo, Volkswagen AG’s battery unit. "We have no supply chain. This needs to be set up," he added, noting that the LFP supply chain is currently being set up in Morocco rather than in Europe. As a bridge between Africa and the old continent, the kingdom is rich in phosphate resources, essential for the manufacture of LFP cells, and benefits from smooth trade with the United States.

China has significant control over global battery production and essential raw materials such as lithium, nickel and cobalt. In search of independence in this sector, Europe, which is lagging behind, is losing investments to the United States and Canada, where financial support policies are more attractive.

Lithium Iron Phosphate (LFP) batteries have emerged as a technology of choice in recent years due to their lower cost and increased efficiency. China can produce LFP batteries at almost half the global average cost, further strengthening its dominant position in this market, according to Bloomberg.

In 2023, CNGR Advanced Material Co., a Chinese battery component manufacturer, has partnered with the African private equity fund Al Mada to build an industrial base in Morocco. With a total investment exceeding $2 billion, they plan to start production of battery materials at a new site in Jorf Lasfar, on the Atlantic coast of Morocco, by 2025, it is specified.