Major automaker relocates EV output to Africa

From the newsletter

In a rare shift, Netherlands-based automaker Stellantis is moving the production of the electric Citroën C4 from Europe to Africa. Stellantis plans to produce the electric version of the Citroën C4 in Morocco starting 2027. The company will, however, continue to assemble fuel models at its plant in Spain, where the electric and hybrid models are also made.  

• Stellantis has invested more than $340 million to upgrade its plant in Morocco in recent years to support new product lines. The factory currently produces Peugeot 208 II, Citroën Ami, Opel Rocks Electric, and Fiat Topolino. 

• Shifting manufacturing from Europe to Africa is a major statement and will significantly increase Africa’s electric car production capacity. The Citroën C4, including its electric version, is a popular sedan which sells hundreds of thousands of units annually. 

More details

• Manufacturing electric vehicles in Morocco will not be new to Stellantis. In fact, it is likely that the success of its Morocco-made electric micro-mobility vehicles, especially Citroën Ami, Opel Rocks Electric, and Fiat Topolino, has informed its decision to make the electric Citroën C4 in the country. The Kenitra plant has a capacity to produce 70,000 electric cars annually.

• The fresh investments in Morocco’s EV industry will not only create thousands of new jobs but also facilitate skills and technology transfer. Motor vehicles have become a key cog in the country’s exports, even as it plans to increase production to reach 107,000 EVs by the end of 2025.

• Morocco has become an attractive automotive hub due to its strategic location, supportive government incentives, robust infrastructure, and a skilled workforce. Its proximity to Europe and favourable trade agreements with the EU, US, and China facilitate access to key markets and efficient supply chains.

• Manufacturing costs in Morocco are also lower than in Europe, which is one of the main reasons why Stellantis and other automakers are investing heavily in the country. Labour costs for vehicle production in Morocco are for instance the lowest globally, according to a recent report by the Oliver Wyman consulting firm. While the global average labour cost to produce a vehicle is $880, it only costs $106 in Morocco, cheaper than even China, where labour costs $597.  

• Besides EV manufacturing, Morocco is also creating a strong battery manufacturing industry. A number of major battery production facilities are under construction, mainly funded by Chinese companies. These battery firms include Gotion High-Tech, BTR New Material Group, CNGR Advanced Material, Hailiang, and Shinzoom.

• While the majority of the EVs made in Morocco are targeted for the export market, especially Europe, the North African country’s leading role in the industry will be beneficial to the continent. For African nations heavily reliant on raw material exports, Morocco's EV industry offers a model for industrial diversification, shifting towards higher-value manufacturing.

Our take

• With global automakers like Stellantis, Ford, and Volvo pouring money into production of EVs, hybrids and batteries in major economies like Morocco, South Africa, Egypt and Nigeria, the continent is on the cusp of a significant transformation in its role within the global EV supply chain. 

• As Morocco ramps up EV production and the cost of manufacturing becomes more competitive, the availability of Africa-made EVs could increase significantly. Leveraging the African Continental Free Trade Area (AfCFTA), these vehicles could become more accessible. 

• Morocco should serve as an inspiration for other African nations with automotive aspirations, such as South Africa, Kenya, and Egypt. However, they should explore specialization in different segments of the EV market such as electric buses, two-wheelers, or specific components, leveraging their own strengths.