Automotive Energy Supply Corp has put the brakes on its $1.6 billion battery factory in South Carolina, citing policy and market uncertainty. The Japanese-based company had planned to supply BMW’s electric vehicle production, but shifting economic conditions have forced a pause in construction.
The facility, located in Florence, was expected to create 1,600 jobs and strengthen South Carolina’s growing EV sector. AESC has already invested $1 billion into the project but has decided to halt further development until conditions stabilize. The company has assured officials that it remains committed to fulfilling its investment and hiring pledges, though no timeline has been provided for when construction will resume.
South Carolina Governor Henry McMaster pointed to uncertainty in federal tax incentives for EV buyers, fluctuating tariffs, and broader economic instability as contributing factors. The Biden administration’s evolving stance on electric vehicle subsidies and trade policies has left manufacturers in limbo, making long-term planning difficult.
BMW, which is building its own battery assembly plant near its auto facility in Greer, has stated that the pause will not affect its plans to open its plant in 2026. The automaker remains committed to its EV expansion, though supply chain disruptions could pose challenges.
South Carolina has aggressively pursued foreign investment in the EV sector, securing commitments from Volkswagen-owned Scout Motors for a $2 billion plant and other manufacturers looking to establish operations in the state. However, uncertainty surrounding tariffs and federal incentives has raised concerns about the long-term viability of these projects.
Investors thrive on stability, and uncertainty is the enemy of business growth. AESC’s decision to pause construction reflects broader concerns about the future of EV manufacturing in the United States. Until federal policies provide clearer direction, companies may hesitate to commit to large-scale investments.
Sources:
https://www.ien.com/home/news/22943003/billiondollar-battery-factory-halts-bmw-ev-project
