LSE: Morocco, leader in EV & green hydrogen technology
Morocco’s automotive sector is undergoing a remarkable transformation. After starting as a regional assembly hub, the country’s car industry has grown into a leading player in electric vehicle (EV) and green hydrogen technology, said the London School of Economics in a report.
This North African nation is strategically positioning itself as a global automotive powerhouse, attracting major international players while nurturing local talent and innovation, said the report co-authored by experts Angela Kolongo and Inas El-Aidi.
Morocco has achieved these impressive results amid evolving geopolitical dynamics, including rising protectionism and escalating global competition.
Morocco’s automotive journey started back in 1959 with SOMACA, a company that initially focused on assembling cars from imported parts from Italy and France. Morocco’s smart policy decisions like the integration-compensation law and targeted free trade agreements attracted major investments and manufacturers such as Renault-Nissan, PSA (Stellantis), and more recently BYD.
These partnerships have boosted production numbers to nearly a million cars a year and have also facilitated vital technology transfers and specialized skills development for Moroccan workers, said the LSE research paper.
The Renault-Nissan plant in Tangier is Africa’s largest and greenest car factory, exporting 90 per cent of its vehicles to 74 countries. Stellantis, has built a complete automotive value chain in Kenitra, including engine manufacturing. Together, they have helped transform Morocco into a true automotive manufacturing hub.
Today, Morocco wants to go far beyond car manufacturing. The country is building a decarbonized transportation value chain to future proof production, underlined the LSE report, saying the country is embracing the global shift towards EVs and green hydrogen-powered vehicles.
Chinese EV giant BYD has set up shop in Morocco, with plans to build three additional factories focused solely on electric mobility. This expansion fits perfectly with Morocco’s ambitious goal to produce one million passenger vehicles a year by 2025, mostly hybrid or electric cars.
According to LSE, Morocco’s proximity to Europe, coupled with its free trade agreements with major economic blocs like the EU and the US, provides a significant advantage. The Kingdom is also expected to fully capitalize on the African Continental Free Trade Area (AfCFTA) to expand export markets.
Morocco is navigating the complexities of global trade wars and protectionist measures, leveraging its geographic advantages, skilled labor, and fiscal and financial incentives, said the experts.
With abundant phosphate reserves, notable reserves of cobalt and manganese, and a strong renewable energy production capacity, Morocco is set to play a vital role in the rapidly expanding global EV supply chain, solidifying its position in the automotive industry, underlined the LSE paper.