China, a global leader in battery production, has taken a proactive approach to address this gap is taking a significant role in establishing a battery supply chain for Europe by investing in Morocco, as European nations struggle to develop their own infrastructure to support electric vehicle (EV) production. According to Sebastian Wolf, Chief Operating Officer of Volkswagen AG’s battery unit PowerCo, Europe is currently lagging in setting up its supply chain for Lithium iron Phosphates (LFP) batteries, while China is setting up the Lithium Iron Phosphates (LFP) supply chain in Morocco. Wolf highlighted at a Stuttgart event that, “Right now, we have to be honest that the set-up of LFP supply chain is happening in Morocco and not in Europe.” This development underscores Europe’s challenge in catching up with China’s advanced battery technology and supply capabilities.
China’s Strategic Edge with Morocco’s Phosphates
This strategic move underscores China’s dominance in the global battery market, allowing them to maintain a stronghold in Europe by leveraging Morocco’s proximity and resources. China dominates the global battery market and controls a significant portion of the raw materials needed for battery production, such as Lithium, Nickel, and Cobalt. While Europe is working to build its own supply chain, it remains years behind in technology and faces fierce competition for investment from the US and Canada, where government incentives are more substantial. LFP batteries, which are becoming more popular due to their cost efficiency and improved performance, are a key focus. China’s ability to produce these batteries at nearly half the global average cost gives it a competitive edge.
Morocco’s rich in Phosphates resources are the backbone of this new supply chain and a crucial component for LFP batteries making Morocco an ideal location for battery component manufacturing combined with the country’s strategic location, near Europe, makes Morocco a key player in the global battery market. This natural resource advantage has become a focal point for this supply chain development. In partnership with the African investment fund Al Mada, CNGR Advanced Material Co., a Chinese battery component manufacturer, plans to invest over $2 billion to establish a production facility in Jorf Lasfar by 2025.
