AESC Group, a Japanese company, has made the decision to halt the construction of an electric vehicle (EV) battery cell manufacturing plant in the United States. The $1.6 billion facility, which was being built in Florence, South Carolina, was intended to supply BMW’s nearby vehicle manufacturing operations starting in 2026. The company cited political uncertainty and weakening market demand as the reasons behind the suspension of the project.
Local politicians have pointed to the “potential discontinuation” of federal tax incentives for EV buyers and corporate tax incentives for manufacturers under the new US administration led by President Donald Trump as contributing factors to the decision. AESC confirmed in a statement that construction at the South Carolina facility is being paused due to policy and market uncertainty. They mentioned that construction will resume once market conditions become more favourable, but did not provide a specific timeline for when that might happen.
The company had already invested $1 billion in the Florence plant, which was expected to directly employ around 1,600 workers. AESC had also previously cancelled plans for a second battery plant in South Carolina. Despite the suspension of the AESC plant, BMW has stated that it will proceed with its plans to build a battery pack assembly facility in Greer, South Carolina, slated to open in 2026.
This decision by AESC to suspend construction of the plant comes shortly after the company’s opening of a new battery cell manufacturing plant in Douai, France. The company also operates battery plants in China, Japan, Spain, Germany, and has one under construction in Kentucky. The future of the South Carolina facility remains uncertain, pending changes in market conditions and government policies.
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