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

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.