Ongoing construction at AESC's battery factory site in Florence County.
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Automotive Energy Supply Co. (AESC) is a Japanese electric vehicle battery technology company established to supply advanced battery cells to major automotive manufacturers such as BMW. The company has invested approximately $1 billion in constructing a $1.6 billion gigafactory in Florence County, South Carolina, which is designed to create around 1,600 jobs and support regional economic development. AESC’s facility is currently around 75 percent complete and is strategically important for the region’s automotive industry, especially as it aims to provide batteries to BMW’s manufacturing plants. Despite recent pauses in construction due to policy and market uncertainties, AESC remains committed to fulfilling its project commitments and supporting electric vehicle growth in the United States.
Automotive Energy Supply Co. (AESC) has paused construction of its $1.6 billion battery cell gigafactory in Florence County, attributing the decision to policy and market uncertainties affecting electric vehicle incentives. The project is 75% complete, with significant investments already made. AESC has not laid off employees but has halted new hiring. The construction freeze raises concerns about job creation and economic impacts in the area, particularly as the plant is expected to supply BMW. Local officials emphasize the project’s importance for workforce opportunities and community development.
Florence, South Carolina – Automotive Energy Supply Co. (AESC), a Japanese electric vehicle battery technology company, has announced a halt in construction at its $1.6 billion battery cell gigafactory located in Florence County. The company attributed this decision to ongoing policy and market uncertainties, which have raised concerns regarding the future of electric vehicle incentives and tariffs.
The construction of the AESC plant, which is currently around 75 percent complete, has already seen an investment of $1 billion from the company. Although the construction has paused, AESC has confirmed that it has not laid off any current employees. However, they have put a hold on any new hiring activities associated with the project.
AESC’s decision was largely influenced by apprehensions over existing U.S. tariffs that could affect profitability, as well as the possibility of changes to federal tax credits aimed at new electric vehicle purchases. These changes could potentially eliminate the $7,500 tax credit, diminishing the financial incentive for consumers considering electric vehicles.
Despite the construction halt, AESC remains committed to the project, which is projected to create 1,600 jobs in Florence County. The plant is particularly significant as it will supply battery cells to BMW’s manufacturing facilities in the region. The South Carolina state government has also backed the project with over $255 million in incentives, which includes $135 million allocated for project costs and $120 million for off-site infrastructure and a workforce training facility.
Local officials, including the CEO of the Florence County Economic Development Partnership, have expressed a commitment to keeping communication open with AESC while they navigate these uncertainties. The Florence City Council has communicated concerns regarding how this project affects job opportunities and the local economy, highlighting the importance of the AESC plant for community development. Mayor Lethonia Bradley Barnes has pointed out that the project is vital for creating employment opportunities and bolstering the local economy.
In a related development, AESC had initially announced plans for a second building on the site but later determined that a single plant would be sufficient to meet BMW’s battery supply needs. This revised strategy reflects the company’s adaptability to market conditions while reaffirming its dedication to fulfilling its commitments to BMW.
The construction pause at AESC follows a similar situation at Volvo’s manufacturing facility in nearby Berkeley County, which also temporarily halted operations due to uncertainties linked to federal policies impacting the automotive and electric vehicle sectors. This trend indicates a broader hesitation within the electric vehicle industry, primarily stemming from shifting U.S. trade policies and potential ramifications for partnerships with major manufacturers like BMW and Volkswagen.
Nevertheless, BMW has indicated that construction of its new battery assembly plant, planned for opening in 2026, will proceed as scheduled and remains unaffected by AESC’s temporary pause. As the situation continues to evolve, local and state officials are engaged in discussions to assess and address the economic impacts resulting from these developments.
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