LG and Huayou’s Significant Automotive Investment in Morocco

In a major announcement for the Moroccan automotive sector, LG has just confirmed its intention to invest in Morocco and to enter into a partnership with the Chinese group Huayou for the construction of an LFP cathode factory intended for electric car batteries, as well as a lithium conversion plant (CP).

Scheduled to start in 2026, this new factory will aim to produce 50,000 tonnes of LFP cathodes per year, enough to equip 500,000 electric vehicles each year. This announcement confirms LG’s desire to position itself in the booming market for electric cars and to contribute to the transition towards more environmentally friendly mobility.

According to the initiators, the choice of Morocco for this establishment is explained by its privileged geographical position as a gateway to Africa and Europe, which offers strategic opportunities for the export of manufactured products. In addition, Morocco has a dynamic and competitive automotive ecosystem, with quality infrastructure and a qualified workforce.

Another major advantage of Morocco is its status as one of the few countries in the world to benefit from free trade agreements with both the European Union and the United States. In fact, only 20 countries in the world benefit from a free trade agreement with the United States. Other countries are heavily penalized by the protectionist measures of the Inflation Reduction Act (IRA), particularly with regard to electric vehicles.

This strategic choice will allow LG to produce electric cars in Morocco while benefiting from the competitive advantages offered by trade agreements concluded with the two largest economies in the world. Electric cars manufactured outside the United States or countries that do not have a free trade agreement with the United States are not eligible for the $3,500 electric vehicle tax credit.

The establishment of this LFP cathode factory in Morocco will increase the production capacity of this type of battery, essential for electric vehicles. LFP cathodes are renowned for their stability, safety and durability, making them an ideal choice for automotive applications. By increasing the availability of these cathodes, LG will contribute to the democratization of electric vehicles and the reduction of the carbon footprint of the automobile industry.

This announcement raises high expectations for the positive impact on the domestic automobile industry. In addition to strengthening the kingdom’s position as a regional electric vehicle production hub, this investment is also expected to generate local jobs and foster the development of specialist technical skills in the field of electric car batteries.

This article is originally published on maroc-diplomatique.net

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