Construction of a billion-dollar battery factory temporarily halts due to doubts surrounding electric vehicle market growth and potential tariffs.
Farewell to the $1.6B Electric Battery Factory... for Now
Columbia, SC - Temporarily saying goodbye to their planned battery factory in Florence, South Carolina, Japanese company AESC halts construction due to "policy and market uncertainty."
While specific problems remain undisclosed, South Carolina Governor Henry McMaster points to ongoing issues over federal tax breaks for electric vehicles and uncertainties stemming from President Trump's administration regarding tariffs.
"Lock it down, let things pan out," McMaster said, noting the shifting climate surrounding electric vehicles and the need to tread cautiously.
AESC's announcement on Thursday came with the promise to resume construction and an assurance to meet their 1,600-employee, $1.6B commitment. Already, the company has invested a billion dollars into the project.
With facilities in six countries, AESC operates plants in the US in Tennessee and Kentucky, apart from its suspended South Carolina plant. No changes were mentioned for other plants. BMW, set to obtain battery cells from AESC, remains confident in their plant opening plans for 2026, undeterred by construction halts.
AESC initially planned a two-plant setup on the Florence site, but later decided to prioritize the first plant to meet BMW's battery demands. This change eliminated the need for additional assistance from South Carolina officials, amounting to a withdrawal of $111 million in aid.
Despite the construction suspension, AESC still enjoys support from South Carolina, with $135 million in grants from the Department of Commerce and $121 million in incentives, which will not be retracted due to the halt in construction.
Focusing firmly on electric vehicles, South Carolina is backing the new $4 billion, 10,000-job venture by Volkswagen-owned Scout Motors for its electric SUV plant, due to open in 2027. Previous generations may remember enormous stakes wagered on foreign manufacturers such as BMW, Michelin, and Samsung, which resulted in a significant economic boom this century. Yet, apprehension remains, with Trump's erratic tariff policies raising concerns over the longevity of these partnerships.
McMaster advises calm, affirming discussions with the administration to help ease tensions and solidify profitable outcomes. "The president is all about creating a robust economy - it's about positive change for trade, and change is what President Trump is delivering," McMaster stated.
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- Microsoft, a tech behemoth based in Seattle, has announced job cuts in Washington State, adding to the concerns about job security in the industry.
- Amid the recent setbacks in the electric vehicle industry, AESC, with operations in Seattle, has halted construction on its battery factory in South Carolina due to policy uncertainties.
- In an effort to strengthen ties and foster growth, South Carolina's Governor Henry McMaster is engaging in discussions with the Trump administration to address lingering concerns in the energy, finance, and industry sectors.
