LG Energy Solution eyes site in Morocco for EU supply chain
07/31/2024 07:33 AM
LG Energy Solution (LGES) is eyeing a site in Morocco for a battery production plant. The South Korean battery supplier plans to produce batteries in Morocco and export them to Europe.
“Morocco is a key candidate for this expansion due to its strategic location and growing industrial capabilities,” said Wonjoon Suh.
Wonjoon Suh, the head of LGES’ advanced automotive battery division, has shared that the company is considering three locations for a battery plant to support an EU supply chain. In addition to Morocco, LGES is also considering Finland and Indonesia. The new battery plant will build a supply chain for the EU electric vehicle (EV)market.
Europe’s EV market is in the midst of a shift. The European Commission (EC) started implementing additional tariffs of up to 38% on China-made EV imports, following the United States footsteps. US President Joseph Biden imposed 100% tariffs on Chinese EVs earlier this year.
“The EU’s new tariffs have created significant pressure for us and other battery manufacturers to find cost-effective solutions,” Suh explained. “By setting up a facility in Morocco, we can better manage production costs and remain competitive in the European market.”
European automakers will have to count the pennies to compete with China’s affordable electric vehicles. Even with the Commission’s additional tariffs, which will be added to the EU’s current 10% rate, China-made EV prices are low.
“Our goal is to reduce manufacturing costs to levels comparable to our Chinese rivals within the next three years,” noted Suh.
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