China now makes more than seven in 10 of the world’s electric cars. In 2024 it produced over 12 million, 1.25 million of which were exported, mainly to Europe.
The EU is worried about this – alarmed by cheap, state-subsidised Chinese vehicles flooding its market and threatening the 13 million jobs which depend on its own auto industry. So the bloc has spent the past two years building a system of tariffs and rules to keep Chinese cars at bay.
In 2024, it imposed extra duties of up to 35% on Chinese electric vehicles (EVs), on top of an existing 10% import tariff. So far, though, the EU’s tactics have yielded limited results.
Chinese vehicle sales in Europe nearly doubled between 2024 and 2025.
And much of this sales volume is being driven by the EV powerhouse that is developing at speed in Morocco.
Chinese firms producing cars in Morocco avoid exposure to those EU tariffs, and have announced US$6 billion ($8.62 billion) of investment in battery and electric car component plants in the country.
As a production base, Morocco has plenty of other advantages too. Its deep-water port in Tangier is the largest in Africa and the Mediterranean. It is also surrounded by state-sponsored industrial zones built specifically for carmakers and their suppliers.
Like its neighbours, Morocco has a free trade agreement with the EU, but is the only North African country which has one with the US.
And crucially, it has a good supply of the critical minerals needed for making batteries for EVs, including around 70% of the world’s phosphate reserves and plenty of cobalt.
Nor is Morocco starting from scratch in the car manufacturing business. Cars are the country’s biggest export. Many Moroccan workers have been trained in automotive assembly thanks to two major car companies.
Renault (EPA:RNO) and Stellantis (NYSE:STLA), the owner of 14 car brands including Peugeot, Fiat, and Alfa Romeo, form a manufacturing base in Morocco that exported US$17 billion in cars and parts in 2024. This made Morocco one of the EU’s largest automotive trading partners ahead of China.
Electric dreams
Of the 560,000 vehicles Morocco produced in 2024, the vast majority were petrol and diesel models. Only around 50,000 were electric.
But a new wave of investment can help the industry shift to green. Recent multi-billion-euro commitments from Stellantis and Renault will expand EV and hybrid capacity. At the same time, Chinese investment is filling domestic gaps in cathode and battery cell production.
This transformation did not happen to Morocco by chance. The government has spent two decades laying the groundwork.
It has built “free zones”, areas where businesses can import, manufacture, process, and re-export goods without paying normal taxes or customs duties. These include automotive “clusters”, including the Tanger “automotive city”.
This year, Morocco introduced a carbon tax to keep its exports compliant with EU rules.
So Morocco has been positioning itself to benefit from the EU tariffs. Whether Morocco actually gains from this boom depends on what kind of production Chinese firms undertake.
They could treat Morocco as a mere transit hub, sending goods through Morocco with minimal processing purely to evade tariffs. Brussels has already caught one such case, ruling in 2025 that aluminium wheels shipped from Morocco were being unfairly subsidised by Beijing.
Or they could do the opposite: build real factories, share technology, train local engineers, and buy from Moroccan suppliers. This is what would turn the current boom into lasting green industrialisation, of the type that the African Union wants to encourage, linking African mineral reserves to clean-energy manufacturing.
But there are potential stumbling blocks which could prevent Morocco from benefiting from this new wave of investment in the long term.
First, the EU rules themselves may not last. Its tariffs on Chinese electric cars are set for only five years, and legal challenges are already underway. Second, the technology may remain in Chinese hands. And third, the geopolitical and climate context is so volatile that business plans could change very quickly.
On the plus side, Morocco has an established manufacturing footprint and government support. So the unintended consequences of EU trade policy could end up producing one of the biggest green industrialisation stories of the next decade.
Main image: Unsplash
