More than $11 billion in announced Chinese battery projects have begun to take shape in Morocco, creating a new industrial base for electric vehicle battery production on Europe’s doorstep. The commitments include plans in Jorf Lasfar, Bouknadel and Tangier between 2023 and 2024, and industry analysts warn they could let Chinese firms supply Western markets while avoiding tariffs and subsidy limits. That prospect has prompted alarm among European Union officials worried about trade and subsidy rules that determine access to US and EU markets. The immediate milestone to watch is the third quarter of 2026, when a Moroccan report says initial production at one major gigafactory could begin.

European Union officials have grown alarmed because Chinese battery firms announced and started building multi-billion-dollar projects in Morocco, potentially creating a manufacturing corridor that serves Western markets without running into existing export restrictions.

The scale is concrete. The Transnational Institute paper by Ali Amouzai cites a September 2023 CNGR plan for roughly $2 billion at Jorf Lasfar, described as a joint venture with the Moroccan royal family’s Al Mada investment group. It lists a June 2023 Gotion High-Tech deal for an estimated $6.4 billion battery project at Bouknadel, with a long-term target of about 100 gigawatt-hours per year. And it records a March 2024 investment agreement with BTR New Material Group for more than $3 billion to build a battery factory in Tangier Automotive City.

Taken together, the investments amount to north of $11 billion on paper, and they're not isolated cell factories. The Transnational Institute analysis argues these moves amount to China-led vertical integration, from refining critical minerals to producing cathodes and cells on Moroccan soil. Ali Amouzai wrote that Morocco has become "a prime destination for large-scale investments in the refining of strategic and critical minerals that are used in the production of electric vehicle batteries."

That industrial logic is underpinned by Morocco’s resource endowments and geography. The Transnational Institute notes Morocco ranks ninth globally in cobalt production and eleventh in cobalt reserves. Chatham House research adds that Morocco controls around 72 percent of the world’s phosphate-rock reserves, a feedstock relevant to lithium-iron-phosphate battery chemistries. Observers link those advantages to Morocco’s existing automotive industrial zones and its proximity to European markets.

Policy friction and the friends-shoring charge

Part of the European unease is about rules. The Transnational Institute paper highlights that Chinese firms are using Morocco’s trade links, including a free trade agreement with the United States, to qualify for subsidies under the US Inflation Reduction Act and to sidestep tariffs and other barriers.

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The paper describes that strategy as a form of friends-shoring and presents it as the immediate source of EU concern.

Chatham House notes the broader policy backdrop. The EU’s Green Deal and its Open Strategic Autonomy agenda, together with tariffs approved on some Chinese electric-vehicle imports, are intended to protect European industrial supply chains. Those measures, Chatham House argues, may have an unintended consequence: encouraging firms to locate production in jurisdictions that retain preferential market access to western consumers and incentives.

For Brussels the risk is twofold. First, a North African production base could erode the protective effect of EU tariffs and US import restrictions. Second, it may allow firms to qualify for subsidies or tariff exemptions through rules of origin and trade arrangements, reducing the leverage EU policy makers hoped to exert over supply chains. The Transnational Institute paper frames That dynamic as a practical byproduct of well intentioned industrial protection.

Chinese corporate commitments sit at the centre of the debate. The Gotion High-Tech project, for example, plans a phased rollout with an initial capacity target in 2026, according to reporting by a Moroccan news site, which also said one major Chinese gigafactory could begin initial production as early as the third quarter of 2026. Those timetables, if met, would bring Chinese-made cells and components closer to European assembly lines faster than many in Brussels expected.

Morocco’s membership of China’s Belt and Road Initiative since 2017 and its closer strategic ties with Beijing are cited as additional enablers of rapid Chinese investment and technology transfer. That diplomatic layer makes the country an attractive destination for investors who prize market access, resource security and a stable industrial platform for battery manufacture.

Regional analysts have begun to propose policy responses that don't simply shut the door. One suggestion is to combine EU standards and investment capacity with the speed and scale that Chinese firms bring, channeling the opportunity into broader local industrial development rather than leaving it to external actors alone. The briefest practical implication is that Brussels must clarify how it will police rules of origin and subsidy eligibility if it wants protective measures to be effective.

For now the dispute is technical as much as strategic: it revolves around tariffs, subsidy rules and the fine print of trade arrangements. But the stakes are industrial. If the projects proceed as described in the Transnational Institute paper, Morocco could become a launchpad for batteries destined for Europe and the US, complicating the policy choices of capitals that want to shield domestic industry without cutting off global supply.

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Moroccan news site moroccoworldnews.com said initial production could begin in the third quarter of 2026; that date is the next concrete milestone for assessing whether these projects will start feeding Western supply chains.

This article was created with AI assistance.