News Summary
The Automotive Energy Supply Corp. (AESC) has paused the construction of its $1.6 billion electric vehicle battery factory in Florence, South Carolina, citing policy and market uncertainties. Although the company intends to resume work eventually, no timeline has been provided. The factory is projected to create around 1,600 jobs and has already received significant investments. Governor Henry McMaster expressed concerns over federal tax incentives and tariffs impacting the EV sector, while reassurances were made that existing financial commitments to AESC will remain intact despite the construction delay.
South Carolina – The Automotive Energy Supply Corp. (AESC), a Japanese battery manufacturer, has announced a halt to the construction of its $1.6 billion electric vehicle (EV) battery factory in Florence, South Carolina. The company cited rising “policy and market uncertainty” as the primary reason behind this decision.
The pause in construction was publicly disclosed on Thursday, with AESC stating its commitment to eventually resume work on the facility, although no specific timeline has been provided for when construction will restart. The factory is planned to hire approximately 1,600 employees upon completion and has already seen an investment of $1 billion into the project.
Governor Henry McMaster of South Carolina has indicated that this construction halt may result from anticipated changes in federal tax incentives for EV buyers and other incentives that encourage the establishment of EV-related businesses in the state. Furthermore, uncertainties surrounding tariffs, which are linked to the policies of the Trump administration, have contributed to this situation. However, the South Carolina government has assured that AESC will continue to receive $135 million in grants and $121 million in bonds, and these financial offers are not expected to be jeopardized by the temporary suspension of construction.
AESC is not new to the US market; the company operates existing facilities in Tennessee and is currently working on another factory in Kentucky. The Florence plant is strategically significant as it is intended to supply battery cells for BMW, which has plans for its own battery assembly facility near its existing auto production site in Greer, South Carolina. Despite AESC’s construction delay, BMW has confirmed that the pause will not impact its scheduled opening of the battery plant in 2026.
In a previous move, AESC had adjusted its plans for the South Carolina facility, opting to eliminate a proposed second factory, reasoning that the first plant would sufficiently meet BMW’s battery demand. This adjustment also led local officials to retract a planned assistance package worth $111 million, which aimed to support the establishment of the second factory.
The investment landscape for the electric vehicle market in South Carolina appears robust, with significant initiatives underway. For instance, Volkswagen’s Scout Motors is moving forward with plans for a $2 billion electric SUV plant set to create around 4,000 jobs by 2027, reflecting the state’s commitment to expanding its role in the EV sector. South Carolina has historically attracted major foreign manufacturers such as BMW, Michelin, and Samsung, contributing to a sustained economic boom.
However, there are growing concerns among stakeholders regarding how the potential impact of Trump’s tariffs may affect the state’s manufacturing partnerships and investments. In light of these concerns, Governor McMaster has urged stakeholders to remain patient as discussions with the Trump administration are ongoing, aimed at finding resolutions to the uncertainties clouding the electric vehicle industry and related investments.
As the landscape continues to evolve, the outcome of these discussions could play a vital role in determining the future of AESC’s operations in South Carolina and the broader implications for the region’s electric vehicle manufacturing ambitions.
Deeper Dive: News & Info About This Topic
- AP News: Battery Plant in South Carolina
- Wikipedia: Electric Vehicle Battery
- Columbia Business Report: EV Battery Manufacturer
- Google Search: Electric Vehicle Battery Manufacturers
- Post and Courier: Volkswagen’s Scout Plant
- Encyclopedia Britannica: Electric Vehicle
- Fuel Cells Works: Mixed Fleet Buses
- Google News: Electric Vehicles South Carolina
Author: STAFF HERE FLORENCE WRITER
FLORENCE STAFF WRITER The FLORENCE STAFF WRITER represents the experienced team at HEREFlorence.com, your go-to source for actionable local news and information in Florence, Florence County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Florence Festival of Lights, Pee Dee Pride, and agricultural expos at the Florence Center. Our coverage extends to key organizations like the Florence Regional Chamber of Commerce and the Pee Dee Area Council of Governments, plus leading businesses in healthcare and retail that power the local economy such as McLeod Health and Pee Dee Electric Cooperative. As part of the broader HERE network, including HERECharleston.com, HEREColumbia.com, HEREGreenville.com, and HEREHiltonHead.com, we provide comprehensive, credible insights into South Carolina's dynamic landscape.
