AESC halts battery factory construction in South Carolina
Political developments in Washington, in particular, are currently causing uncertainty in the industry. U.S. President Donald Trump’s new trade policy, the planned changes to import tariffs and a controversial tax law that provides for the abolition of the current electric vehicle subsidy could have a massive impact on investments and sales markets. Among other things, the draft law provides for the cancellation of tax breaks of USD 7,500 for buyers of new electric cars. Subsidies for charging infrastructure are also to be cancelled.
AESC explained in a statement that it had already invested over a billion dollars in the plant and was sticking to the overall project; construction would resume as soon as the situation had stabilised. However, the company did not give an exact time frame. The state of South Carolina’s funding commitments totalling more than 255 million dollars, including infrastructure aid and grants to Florence County, currently remain untouched.
Governor Henry McMaster expressed cautious optimism. Although he recognises the challenges posed by the current economic policy, he emphasised that the state is continuing to grow. He appealed to citizens and investors to remain calm: “We believe that, give it some time, and it’ll work out.”
The news comes at a sensitive time. AESC had already cancelled its ambitious expansion plans in February 2025: Instead of the second factory announced in March 2024 with a further 1,080 jobs and an investment of 1.5 billion dollars, only one plant would now be built after all. The withdrawal from the second construction phase also led to the reclaiming of state subsidies totalling 111 million dollars.
The BMW factories in Spartanburg, South Carolina, and in San Luis Potosi, Mexico, will both continue to be supplied from the Florence site, but only from one instead of two factories. The two BMW plants mentioned are to build new class electric cars with 800-volt architecture and cylindrical cells from AESC.
BMW has already invested 700 million dollars in its new battery assembly plant in Woodruff, which is also located in the US state of South Carolina, and plans to install the cylindrical cells supplied by AESC in the battery systems manufactured there. A BMW spokesperson told the South Carolina Daily Gazette that plans for battery assembly remain on schedule and the plant is expected to begin operations in 2026.
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