Electrifying the Future: Assessing the Economic and Environmental Impacts of a Shift Toward EV Production in Morocco

Mahmoud Arbouch

No 2524, Research papers & Policy papers on Economic Trends and Policies from Policy Center for the New South

Abstract: This paper assesses the economic and environmental implications of Morocco’s strategic transition from internal combustion engine vehicle (ICEV) manufacturing to electric vehicle (EV) production, with a particular focus on the regional impacts of localizing high-value battery manufacturing. Using an interregional input-output model, extended with environmental satellite accounts, the study simulates a structural shock related to the wholesale substitution of ICEV-specific inputs with EV-specific components. The results highlight substantial macroeconomic gains, including a 1.9% increase in national GDP and positive employment growth, particularly in Tanger-Tétouan-Al Hoceima, Rabat-Salé-Kénitra, and Casablanca-Settat. However, these benefits are regionally concentrated, exposing the risk of deepening spatial inequalities. Additionally, while the transition enhances Morocco’s position in global green value chains, it also induces a measurable rise in carbon dioxide emissions, especially in industrial and phosphate-rich regions. The prospect of economic advancement accompanied by environmental degradation raises critical concerns about policy alignment between industrial growth and energy decarbonization.

Date: 2025-12
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Persistent link: https://EconPapers.repec.org/RePEc:ocp:rpaeco:rp17_25

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