VW chief highlights Europe's missed opportunities in EV battery production as China expands manufacturing in Morocco for European markets

An executive at Volkswagen recently lamented the fact that China is building EV batteries in Morocco that are powering cars bought by Europeans. 

“We don’t have any supply chain. This has to be set up,” said Sebastian Wolf, chief operating officer for the German automaker’s battery unit at a meeting this week, according to Bloomberg.  “Right now, we have to be honest that the set-up of LFP supply chain is happening in Morocco and not in Europe.”

China has a near monopoly on the production of lithium iron phosphate (LFP) batteries, which are ethically and environmentally superior to other types of lithium ion batteries. They also last longer and are most cost-effective. According to the International Energy Agency, roughly 40% of EV vehicles in 2023 contained LFP batteries. The majority were found in Tesla cars and automobiles made by China’s BYD.  

Europe is trying to play catch up with China and other countries like Canada and the U.S. in the production of LFP batteries. 

Morocco has become a desirable manufacturing hub for Chinese EV companies. It has abundant resources of phosphates, a key component in the batteries. It also benefits from its proximity to the European market and free trade agreements with the U.S.

Last year CNGR Advanced Material Co., a Chinese maker of battery components announced it was investing $2 billion in a plant in Morocco, according to Bloomberg. It reportedly aims to begin output in 2025.