Morocco has become a growing force in the global automotive sector, attracting investment from manufacturers long focused on Spain. Its expansion into battery production is intensifying competition, although the countries are not yet on equal footing in electric-vehicle output: Morocco produced about 560,000 vehicles in 2024, including roughly 50,000 electric vehicles, or 9% of total production. Spain remains Europe’s second-largest car producer and a major destination for Chinese investment.
Over the past decade, Morocco has built on its existing vehicle-assembly base to develop a broader automotive industry, anchored by Renault and Stellantis. Vehicles and parts generated about US$17 billion in exports in 2024. Its position between Atlantic and Mediterranean routes connects factories to markets in Europe, Africa and the Middle East. New battery projects aim to extend the supply chain beyond vehicle assembly into cell and materials production.
Battery Factories and New Investments
The shift toward electric vehicles has made battery manufacturing a new focus of competition. China remains a leading force in the global battery industry, with companies such as CATL and BYD, while Morocco is seeking a larger role in the supply chain. Gotion High-Tech’s lithium-iron-phosphate (LFP) battery project in Kenitra, launched in June 2024, is designed for an initial capacity of 20 gigawatt-hours. The first phase is valued at 12.8 billion Moroccan dirhams; a proposed expansion to 100 GWh could raise total investment to about 65 billion dirhams. The project has reportedly entered trial production and is expected to create around 3,000 direct jobs.
LFP chemistry is widely used in cost-sensitive electric vehicles and does not rely on nickel or cobalt in its cathode. Gotion’s Kenitra development is linked to a broader industrial arrangement with Volkswagen Group and its battery subsidiary PowerCo. The partnership includes three joint ventures, including a Moroccan project for LFP batteries and cathode materials. A separate proposed cathode-material facility is designed for annual output of about 100,000 tonnes, with reported investment of approximately €480 million and a proposed ownership split of 51% for Gotion and 49% for PowerCo. It is intended to supply battery production in Europe, complementing cell manufacturing in Kenitra rather than duplicating it.
Public development institutions have also helped finance the project. The African Development Bank approved a €100 million loan for Gotion Power Maroc and said it would seek up to a further €141 million from financial partners. Chinese investment commitments across Morocco’s battery and electric-vehicle-component supply chain have been reported at about US$6 billion. These projects could strengthen Morocco’s position as a manufacturing base serving several regions. But planned capacity and investment are not the same as current vehicle or battery output.
Why Morocco Is So Attractive
Morocco’s appeal extends beyond labor costs, which are lower than in Spain. Manufacturers are also drawn by its established automotive workforce, export infrastructure and access to nearby markets. Investment in renewable energy is part of the country’s industrial-development strategy, while the scale and cost of energy available to factories remain impressive to production economics. Morocco’s automotive strength today, but, lies in broader manufacturing: roughly 91% of its 2024 vehicle output was not electric. Its battery investments are intended to close that gap; they are not evidence that it has already matched Spain in electric-vehicle manufacturing.
Claims involving battery resources and Western Sahara require a separate legal distinction. The territory’s status is contested, and economic activity there cannot be treated as an uncomplicated extension of Morocco’s domestic industrial base. On 4 October 2024, the Court of Justice of the European Union ruled on EU-Morocco trade and fisheries agreements concerning Western Sahara, finding that the agreements had been concluded without the consent of the people of the territory. The judgment highlighted the relevance of self-determination and the territory’s separate legal status. It does not establish that Morocco’s battery industry controls or benefits from Western Saharan resources. The court’s October 2024 judgment is so relevant to any commercial claims involving the territory.
Geopolitics and Trade Routes
Geopolitics also shapes Morocco’s industrial position. Its location near the Strait of Gibraltar puts it beside one of the world’s major shipping routes, and Tanger Med has become a impressive logistics and vehicle-export hub. Moroccan ports offer manufacturers short routes to European markets, while the country’s trade arrangements differ from those governing goods produced inside China. But a port call alone does not determine whether a shipment is subject to European climate rules: the EU Emissions Trading System’s maritime obligations depend on covered voyages and emissions under EU rules, not simply on a vessel docking in Morocco.
Morocco’s investment push is strongest as a bid to secure future battery capacity and connect local factories to cross-border supply chains. Established vehicle exports and proximity to Europe give the strategy a base; the transition from conventional vehicles to electric production is still underway.
Spain’s Response and Remaining Strengths
Spain is also investing in the electric-vehicle transition. Battery projects associated with Volkswagen’s PowerCo in Sagunto and Stellantis and CATL in Zaragoza are intended to reinforce its industrial position. Spain retains deep manufacturing experience, a skilled workforce and an extensive network of factories operated by global brands, including Volkswagen, Stellantis, Renault, Mercedes-Benz, Ford and Iveco. Membership in the EU single market remains a structural advantage for production and trade within the bloc.
Competition between Spain and Morocco is likely to intensify as automakers reorganize supply chains around electrification. Morocco’s new battery projects could make it a more consequential rival in cells, materials and export-linked manufacturing, while Spain’s established industrial scale remains a impressive advantage. The outcome will depend on execution, production costs, market access and how quickly planned facilities reach sustained commercial output. For a broader look at how energy costs are reshaping the automotive world, see this analysis of why fuel prices in Hong Kong have soared past €200 per tank.
Morocco’s automotive exports have more than doubled in the past five years, making the country Africa’s leading car exporter. Expansion at Tanger Med has helped move vehicles and components, while the automotive sector generated about US$17 billion in exports in 2024. Spain’s auto industry remains a pillar of its economy, but Morocco’s growing investment in batteries and components is raising the stakes as manufacturers reshape global supply chains.
