China is building a battery supply chain in Morocco for Europe

This was revealed by Sebastian Wolff, COO of PowerCo, the battery unit of Volkswagen AG. “We don’t have a supply chain. It has to be created,” Wolf said. He added that the construction of LFP’s supply chain is currently taking place in Morocco, not in Europe. The kingdom, a bridge between Africa and the ancient continent, is rich in sources of phosphate, which is essential for LFP cell production, and benefits from easy trade with the United States.

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China has a large share of the global production of batteries and basic raw materials such as lithium, nickel and cobalt. In its search for independence in this area, underdeveloped Europe is losing investments to the United States and Canada, where financing policies are more attractive.

Lithium iron phosphate (LFP) batteries have become a popular technology in recent years due to their low cost and high efficiency. China can produce LFP batteries at roughly half the global average cost, cementing its dominant position in this market, according to a Bloomberg NEF report.

Read also: Morocco becomes a leader in electric batteries

In 2023, CNGR Advanced Material Co., a Chinese battery components manufacturer, partnered with African private equity fund Al Mada to build an industrial base in Morocco. With a total investment of more than $2 billion, they hope to start producing battery materials at a new site in Jorf Lasfar on Morocco’s Atlantic coast by 2025.