News Summary
AESC has halted the construction of its $1.6 billion battery factory in Florence County, South Carolina, due to ongoing policy and market uncertainties affecting EV production. Despite the pause, AESC remains committed to the project and continues to receive substantial financial support from the state. Governor Henry McMaster has raised concerns about federal tax breaks and tariff ambiguities impacting the electric vehicle sector. The factory aims to create around 1,600 jobs and primarily supply battery cells to BMW, who is developing a separate assembly site nearby.
South Carolina – AESC, a leading Japanese company specializing in battery technology, has paused construction on its planned $1.6 billion battery factory in Florence County, South Carolina. The suspension stems from ongoing “policy and market uncertainty” affecting electric vehicle (EV) production and sales.
The announcement comes as South Carolina Governor Henry McMaster pointed to concerns over potential losses of federal tax breaks for EV buyers, alongside ambiguities surrounding tariffs imposed during the Trump administration, which have contributed to a tense investment climate in the sector.
So far, AESC has invested approximately $1 billion into the Florence facility. The factory is intended to significantly boost the local economy by creating around 1,600 jobs. Despite the current construction halt, AESC has indicated its commitment to resume building the facility at an unspecified future date.
The Florence plant will primarily supply battery cells to BMW, which is concurrently developing a battery assembly site in nearby Greer, South Carolina, that is projected to commence operations in 2026. Initially, AESC had proposed the construction of two factories at the Florence site to meet BMW’s anticipated battery needs. However, upon reassessment, the company concluded that a single factory would suffice, which led to state officials retracting $111 million in projected economic incentives aimed at supporting the project’s growth.
Despite this layoff in construction efforts, AESC will continue to receive substantial financial support from the state. This includes $135 million in grants and $121 million in bonds from the South Carolina Department of Commerce. These funds are designed to facilitate ongoing initiatives despite the stall in construction.
Moreover, the electric vehicle landscape in South Carolina remains vibrant with other significant investments. Scout Motors, a subsidiary of Volkswagen, is poised to invest $2 billion to establish a plant manufacturing electric SUVs. That operation is set to open in 2027, indicating robust interest in the state as a hub for electric vehicle production.
Concerns about the integrity of international investments in the U.S. electric vehicle market have arisen due to the uncertainty surrounding Trump’s tariff policies. Governor McMaster has expressed a balanced outlook, urging patience as local and business leaders actively engage with the Trump administration regarding trade and policy issues impacting the EV industry.
AESC, which operates facilities in various countries including China, the UK, France, Spain, Germany, and has existing plants in Tennessee and a developing site in Kentucky, has noted that it does not plan to alter operations at any of its other plants outside South Carolina, maintaining a stable production trajectory elsewhere.
BMW has reassured stakeholders that the timeline for its projects remains intact, affirming that the battery assembly plant in Woodruff is still scheduled to launch in 2026, independent of any delays pertaining to AESC’s construction status in Florence.
While this pause poses challenges, it underscores the ongoing evolution of the manufacturing landscape for electric vehicles and the delicate interplay between state policy, market dynamics, and international investment in South Carolina’s burgeoning EV sector.
Deeper Dive: News & Info About This Topic
- BMW Blog: AESC Pauses BMW EV Battery Plant
- Wikipedia: Electric Vehicle Battery
- Quartz: South Carolina EV Battery Plant Envision AESC BMW
- Google Search: EV Battery Manufacturing
- ABC News: Billion Dollar Battery Plant Pauses Construction
- Encyclopedia Britannica: Electric Vehicle
- WYFF4: EV Battery Maker Suspends Factory Construction in SC
- Google News: South Carolina EV Battery Plant
- Electrive: AESC Halts Battery Factory Construction in 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.
