The South Korean LG Energy Solution (LGES) is eying Morocco as a potential location for an electric vehicle (EV) battery production plant that will export to Europe, despite the high competition and higher taxes on EV imports into Europe, Reuters said.
Wonjoon Suh, head of LGES’s advanced vehicle battery branch, said that Morocco is one of three locations being considered for lithium iron phosphate (LFP) cathode production.
“We are in talks with Chinese companies that will develop and produce LFP cathodes with us for Europe,” Suh told Reuters.
“Morocco is a key candidate for this expansion due to its strategic location and growing industrial capabilities,” he added.
The plan to start operations in Morocco is consistent with LGES’ objective of providing low-cost LFP batteries, which are in high demand due to their affordability and safety.
This move is in response to the European Union’s June decision to levy tariffs of up to 38% on electric vehicles imported from China.
The tariffs were implemented in response to an anti-subsidy probe aimed at correcting market imbalances.
Morocco’s favorable trade agreements with Europe, as well as its developing reputation as an appealing location for international investment, making it a strong option to host the factory.
Suh also stated that LGES is looking at different partnerships to make this growth a reality. “We are considering various measures, including forming joint ventures and signing long-term supply agreements,” he explained.
“Our goal is to reduce manufacturing costs to levels comparable to our Chinese rivals within the next three years,” he added.
Not only South Korea who is willing to compete with China in the domain, the USA seems to be a great competitor too. Early July, “The Independent” illustrated in a detailed article the competition between China and the USA in electric car production.
More than 250 companies that manufacture cars or their components currently operate in Morocco, where the automotive industry now accounts for 22% of Gross Domestic Product (GDP) and receives 14 Bln dollars in exports, the British daily writes.