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Gotion High Tech, a China-based manufacturer of lithium-ion power batteries and electric transmission and transformation products, has announced plans to invest $6.4bn (45.5bn yuan) to establish a new 100 gigawatt-hour electric vehicle (EV) battery manufacturing facility in Morocco.
Why it matters
Competition for battery manufacturing investment is intense, with myriad countries around the world attempting to establish themselves as global or regional hubs in this field. This deal is undoubtedly a major boost for Morocco’s thriving automotive industry, and a vote of confidence for the country’s investment scene more generally.
Investment Monitor chief economist Glenn Barklie says: “Gotion’s investment is yet another billion-dollar-plus foreign investment in the EV battery industry. The subsector is one of the leading foreign direct investment [FDI] areas for growth in project numbers and value.
“Given the forecast growth of the EV market, which is predicted for about a 10% compound annual growth rate, these types of investments will continue. However, given the scales, there is fierce (and rising) competition among locations. This project win is a testament to Morocco’s thriving automotive cluster and will provide thousands of jobs for the local economy.
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“The automotive sector is a key industry for Morocco. The country accounts for just over 2% of global automotive FDI projects, whereas it accounts for 0.5% of global FDI (all sectors).
“This investment, coupled with Stellantis’ $300m (€274.06m) plans to double its production capacity in Kentra, illustrates Morocco’s growing attractiveness in EV-related FDI.”
No African hub for EVs or the batteries that power them has emerged quite yet, but Morocco is now in pole position to attain this status thanks to such deals. The country is seen as being politically stable (in a region often beset by instability), offering a strong business environment and impressive talent flow. Morocco has already acquired a reputation for punching above its weight when it comes to FDI attraction, a fact evidently not lost upon Gotion.
Gotion has signed a memorandum of understanding with the Moroccan Government for setting up an integrated industrial ecosystem for the production of batteries used in EVs and energy storage systems in a deal that could create 25,000 jobs over the next ten years.
Gotion has R&D centres dotted across the world, in locations such as Hefei and Shanghai in China, Silicon Valley and Cleveland in the US, Tsukuba in Japan, Singapore and Germany. In 2020, Volkswagen (China) invested €1.1bn to become a shareholder of Gotion, and the two committed to jointly carrying out battery technology innovation and R&D in Hefei. This latest deal represents the company’s first foray into north Africa.