Battery cell manufacturer AESC has temporarily paused construction of its $1.6 billion factory in Florence County, South Carolina, citing uncertainty around U.S. economic policy and market conditions.
The plant, which is expected to supply BMW with cylindrical battery cells and create approximately 1,600 jobs, has already received over $1 billion in investment, according to a company statement. AESC said it remains committed to the project and intends to resume construction once conditions stabilize, though no specific timeline was provided.
The pause comes amid growing industry concerns about proposed changes in U.S. trade policy and electric vehicle (EV) incentives. A draft tax bill circulating in Washington includes the potential repeal of the $7,500 federal EV tax credit, as well as cuts to funding for charging infrastructureâmeasures that could significantly affect investment decisions across the EV supply chain.
South Carolina Governor Henry McMaster acknowledged the headwinds but expressed confidence in the stateâs economic trajectory. âWe believe that, give it some time, and itâll work out,â McMaster said, urging residents and businesses to remain calm. The stateâs funding commitmentsâtotaling more than $255 million in infrastructure and development grantsâremain in place.
The announcement follows AESCâs February decision to cancel a second planned factory in South Carolina, a move that resulted in the forfeiture of $111 million in state subsidies. The revised strategy leaves BMWâs U.S. and Mexican EV plantsâlocated in Spartanburg and San Luis Potosi, respectivelyâto be supplied by the Florence facility alone.
BMW, which is building a battery assembly plant in nearby Woodruff with a $700 million investment, said its project remains on schedule. A spokesperson told the South Carolina Daily Gazette that production is expected to begin in 2026, and that AESCâs cylindrical cells will be integrated into its next-generation 800-volt EV battery systems.
Source: The State