Casablanca – Morocco is moving deeper into Europe’s electric vehicle supply chain as a new battery-material project in Kenitra brings the country into a wider industrial network connecting Morocco with battery plants in Spain and Slovakia.

Chinese battery manufacturer Gotion High-Tech and Volkswagen’s battery subsidiary PowerCo are preparing to establish a joint venture in Kenitra with an investment of about $520 million. The facility is expected to produce up to 100,000 tons of lithium iron phosphate cathode materials each year, supplying battery-cell production in Europe.

Gotion will hold 51% of the Moroccan joint venture, while PowerCo will own 49%. The project forms part of a broader cooperation between the two companies covering three production sites in Morocco, Spain and Slovakia. Their combined planned investment across the three projects is about $3.5 billion.

The development gives Morocco a new position in the electric vehicle supply chain at a time when European automakers are increasing their efforts to expand battery production closer to their vehicle manufacturing operations.

The Kenitra facility will produce cathode active materials, which are used inside battery cells. Rather than manufacturing finished batteries at this particular site, the Moroccan operation will supply an essential material to cell factories in Europe. The materials are expected to be used primarily by two other joint ventures being developed in Valencia, Spain, and Šurany, Slovakia.

The Valencia facility is planned to have annual battery-cell production capacity of 29.1 gigawatt-hours, while the Slovakian plant is expected to reach 8.4 gigawatt-hours. Together, the two European plants would have planned capacity of 37.5 gigawatt-hours.

This structure gives each location a different role. Morocco will focus on cathode materials, while Spain and Slovakia will manufacture battery cells. The finished cells can then enter the wider European electric vehicle supply chain.

The choice of lithium iron phosphate, commonly known as LFP, is also significant. LFP batteries have gained attention in the automotive sector because they generally offer lower production costs, long operating life and good thermal stability. They are increasingly used in electric vehicles where cost and durability are important considerations.

European manufacturers have traditionally depended heavily on Asian suppliers for battery materials and cells. China in particular has developed extensive production capacity across several stages of the battery chain. The development of new facilities in Morocco and Europe reflects efforts by manufacturers to create additional production sources closer to the European market.

For Morocco, the project comes at a time when its automotive sector is undergoing a gradual technological shift. The country has developed a large vehicle manufacturing base serving European markets, with major production facilities operated by Renault and Stellantis. Automotive exports have become one of Morocco’s main sources of foreign revenue, while a large network of component manufacturers has developed around vehicle production.

Much of that production has historically been associated with conventional vehicles. As European manufacturers move toward hybrid and electric models, Morocco is seeking to add activities related to batteries and other electric vehicle components.

Gotion’s wider investment in Kenitra is central to this transition. The company is developing an integrated battery manufacturing project in the Kenitra Atlantic Free Zone, with plans covering battery cells and packs. The first phase is expected to provide between 10 and 20 gigawatt-hours of production capacity, while longer-term plans have included a potential expansion toward 100 gigawatt-hours.

The project has received financial support from the African Development Bank, which approved a $109 million loan. The bank has also indicated that additional financing could be mobilized through other financial partners.

The first battery-cell production line is expected to begin operations in October 2026, with a second line scheduled for November. The initial phase is expected to create more than 600 direct jobs, with additional employment potentially emerging as production expands and local suppliers become involved.

The cathode-material project and the larger Gotion battery facility are separate investments, although they are closely linked by their location and technology. The new joint venture with PowerCo will concentrate on cathode materials, while Gotion’s broader project covers battery-cell and pack production.

The distinction is important because the $520 million cathode facility should not be confused with the much larger value attributed to Gotion’s overall Kenitra battery program. The different projects are being developed in stages and have different ownership and production structures.

The geographical position of Kenitra is another factor behind the growing interest in the project. Morocco is located close to the European market, while its ports and road networks provide connections to major European destinations. The country has also developed industrial and free-zone infrastructure around its automotive sector, allowing new suppliers to operate close to established vehicle manufacturers.

The connection with Spain is particularly relevant. The Valencia battery project will be one of the main European destinations for the Moroccan cathode materials. The short maritime distance between Morocco and Spain provides a relatively direct route between the two sides of the Mediterranean.

Spanish industrial developments are also expanding as European manufacturers seek to build domestic battery capacity. Battery projects are being developed in several parts of Spain, while other European countries are pursuing similar investments. Morocco therefore enters a market where manufacturers are simultaneously expanding capacity and reassessing where different stages of production should take place.

The three-site arrangement involving Kenitra, Valencia and Šurany gives the companies an opportunity to distribute production across different locations. Morocco can provide battery materials, while European factories convert those materials into cells for the regional market.

The arrangement could also create opportunities for Moroccan companies outside direct battery manufacturing. Chemical processing, equipment maintenance, transportation, quality control, engineering and industrial services could all become part of the supply network surrounding the new facilities.

The development of these capabilities will be important if Morocco wants to increase the domestic value generated by its growing electric vehicle sector. Vehicle assembly and component production have already created an extensive industrial network, but battery manufacturing requires additional technical skills and specialized suppliers.

The battery projects also come as Morocco seeks to attract investment in new energy-related activities. The country has expanded renewable energy capacity and is developing projects linked to green hydrogen and other low-carbon technologies. A growing battery sector could complement these activities by creating new links between renewable electricity, energy storage and electric mobility.

For Gotion and Volkswagen, Morocco offers access to an established automotive production base and a nearby European market. For Morocco, the partnership provides an opportunity to participate in a segment of the automotive value chain that is expected to become increasingly important as vehicle technology changes.

The partnership also reflects the changing relationship between Chinese battery manufacturers and European automakers. Gotion brings battery technology and manufacturing experience, while Volkswagen and PowerCo provide links to European vehicle production and demand.

Volkswagen and Gotion began cooperating in 2020, and their relationship has since expanded into direct industrial projects. The companies are now developing a production network in which Morocco has a specific upstream role in the battery chain.

Volkswagen has also agreed to sell 5.3% of its stake in Gotion as the two companies adjust their broader financial relationship, while continuing their industrial cooperation. The changes come as the companies deepen their joint activities in Europe and Morocco.

The development of the Kenitra projects does not mean that Morocco will replace the large battery manufacturing centers of Asia. Instead, the country’s emerging role is based on its location, existing automotive capabilities and connections with European markets.

The planned production of 100,000 tons of LFP cathode material annually would nevertheless represent a significant addition to Morocco’s industrial base. Combined with Gotion’s battery-cell plans, the country could gradually move from supplying conventional automotive components toward producing materials and components directly linked to electric mobility.

The shift is taking place while Europe restructures its automotive supply chains. European manufacturers are facing growing demand for electric vehicles, changing battery technologies and pressure to secure supplies closer to their factories. These factors are encouraging investment in battery production across the continent and in nearby countries.

Morocco’s participation gives the country a role in this changing production network. Materials produced in Kenitra are planned to move toward European cell factories, while batteries produced through Gotion’s Moroccan operations could eventually support regional and international markets.

The coming years will show how quickly these projects reach their planned capacities and how much local industry develops around them. For now, the Kenitra investment marks a shift in Morocco’s automotive strategy toward a wider range of activities connected to electric vehicles, with the country increasingly involved in the production stages that precede the final battery and vehicle.