Key Takeaways
Morocco secured development finance, Chinese investments and factory deals, establishing a bankable, integrated battery manufacturing ecosystem.
ADB $114 million loan to Gotion High-Tech signals development financiers now back large-scale battery projects in Africa.
BYD eyes local battery manufacturing in South Africa; policy incentives and mineral processing will determine investor interest across Africa.
China’s electric vehicle (EV) technology in Africa is expanding beyond vehicle exports and assembly to include battery and components manufacturing, with the recent developments in Morocco showing that the sector is now bankable.
The African Development Bank (ADB)’s recent approval of a $114 million loan for the Sino-German battery maker Gotion High-Tech’s gigafactory in the northern African country marks one of the largest development finance commitments to an African battery manufacturing project; an indication that finance institutions are starting to back battery production, which could encourage funding for similar projects elsewhere on the continent.
ADB’s funding comes on the heels of Chinese companies, in partnership with different players, increasingly investing in battery manufacturing and battery materials alongside vehicle exports and assembly operations.
Already, battery components production is on course with the Abu Dhabi-headquartered Falcon Energy Materials company commissioning its 25,000-tonnes-per-year anode materials pilot project in Jorf Lasfar, near Casablanca. The company has technical and strategic partnerships with Chinese firms like Shanghai Shanshan New Material Co. and Hensen for its Morocco anode project.
Down south, the continent’s most sophisticated vehicle market, South Africa, is also emerging as a different kind of opportunity for Chinese automaker BYD, the world’s largest producer of battery electric and plug-in hybrid vehicles, with indications that its plans in the country go beyond selling cars. Rather than following rivals into local vehicle assembly, the company is exploring battery manufacturing, betting on the technology that built its global business.
But there are several key lessons from Morocco, which has already secured financing, manufacturing agreements and factory construction even as South Africa is still building the policy framework that could attract similar investment.
From what is happening in the two countries, policies will determine which African countries attract industrial activity in the EV value chain and which will fall behind.
Morocco’s Head Start
Over the last few years, post-COVID, Morocco has quickly established itself as Africa’s leading destination for battery manufacturing by combining Chinese industrial investment with government support and development finance.
Chinese companies have been expanding across the country’s battery supply chain and in 2024, Morocco signed a $300 million agreement with China’s BTR New Material Group to build a cathode materials plant in Tangier.
Cobco, a Chinese-Moroccan joint venture, has also opened a battery components factory that is expected to produce enough materials for nearly one million electric vehicles annually once fully operational.
Together, these investments complement Morocco’s growing vehicle manufacturing sector, creating an integrated ecosystem where battery materials, components and vehicle production increasingly, though indirectly, reinforce one another.
BYD’s Different Bet on South Africa
Instead of vehicle assembly, the Chinese company is exploring South Africa as a potential location for battery manufacturing. The approach became clearer during the launch of the BYD Finance joint venture with South African banking group Absa in July, where company executives outlined ambitions extending beyond vehicle sales.
Long before becoming one of the world’s largest EV makers, the company built its business on battery technology. Manufacturing batteries in South Africa would allow BYD to leverage that expertise while supplying electric vehicles, energy storage systems and potentially other industries.
South Africa’s policy direction could support those ambitions.
The government has updated its Critical Minerals and Metals Strategy and proposed expanding automotive incentives so that half the value of critical minerals sourced from Southern Africa can count as local value addition in EV battery production. The measures are intended to encourage regional mineral processing while attracting battery manufacturers.
If BYD proceeds with local battery production, it could reduce reliance on imported components while benefiting from existing and future incentive programs.
Two Models for Africa’s EV Future
Morocco and South Africa offer a snapshot of where Africa’s battery industry is heading.
The Northern African country shows how Chinese manufacturers, government policy and development finance can work together to establish battery production. South Africa is trying to create the conditions for similar investment but has yet to secure a major battery manufacturing commitment.
For other African countries hoping to move beyond vehicle assembly, mineral resources alone are unlikely to be enough. Building a battery industry also requires coordinated and stable industrial policy that will attract investors and help create avenues to access long-term financing.
The ADB’s backing of Gotion’s factory suggests that development finance institutions are opening up to support battery manufacturing and not just EV deployment or charging infrastructure. That could improve the bankability of future EV battery projects across the continent.