Morocco to accelerate transition to EV manufacturing 

Al-Monitor Pro Members

Francisco Serrano

Journalist and analyst specialized in North Africa

June 7, 2023

On May 15, Morocco launched its first-ever domestic car brand, Neo Motors. The development stems from a robust car manufacturing base that the kingdom has worked on establishing over the past two decades in partnership with global brands such as Renault and Stellantis. In 2022, sector exports rose by 33% year-on-year to Dh111.3 billion ($10.9 billion). But the long-term prospects for auto manufacturing in the country will hinge on an effective transition into the manufacturing of electric cars. Most companies have so far shied away from setting up shop in Morocco due to the absence of a dedicated electric car component industry, but a memorandum of understanding signed with Chinese electric-car battery manufacturer Gotion High Tech this week could change the lead if the investment fully materializes. 

Scenario 1: Morocco auto manufacturing transitions successfully into electric vehicle manufacturing in the medium term. 

The establishment of a domestic battery plant and other component producers encourages Renault and Stellantis to relocate more of their electric vehicle manufacturing to the kingdom.  Morocco’s labor price competitiveness and proximity to European markets allows the kingdom to attract a third global car manufacturer.  

Over the coming decade, Morocco moves away from manufacturing combustion engine cars, which gradually accounts for a residual amount of automotive output in the kingdom toward the end of the decade.  

However, it is unlikely that Morocco will entirely transition away from building combustion engine cars in the medium-term. It has achieved a track-record in the sector, and keeping both electric and non-electric manufacturing over the long term would allow to meet demand in countries that are slower to transition to electric vehicles.  

Scenario 2: Morocco’s transition into electric vehicle manufacturing stalls 

Insufficient follow-through from domestic suppliers that fail to set up production of electric vehicle components in the kingdom increases the gap between electric manufacturing capabilities in Morocco and other electric car production centers. Without the establishment of a large-scale electric vehicle manufacturer as well as electrical component suppliers, European manufacturers in Morocco are reluctant to relocate more of their electric vehicle manufacturing capacity to the kingdom.  

This leaves Morocco’s auto manufacturing sector dependent on combustion engine vehicle production, making it lose steam in European markets. Demand in Africa and the Middle East allows Morocco to continue automotive exports, but these are limited to less sophisticated markets where the transition to electric cars is slower to take off. 

Given its proximity to European markets, labor cost competitiveness relative to Eastern Europe and its growing forays into electric car manufacturing, it seems unlikely that Morocco will not maintain a foot in the electric car sector over the coming decades. 

Francisco Serrano is a writer and analyst who focuses mainly on North Africa. He has been published in several outlets, including Foreign Policy, World Politics Review and the Middle East Institute. His second book, "As Ruínas da Década," about the past decade in the Middle East, was published in March 2022.