Japanese battery manufacturer AESC halted construction Thursday at its $1.6 billion South Carolina factory, citing policy and market uncertainty as the Trump administration moves to eliminate electric vehicle incentives and consumer interest in EVs hits a six-year low.
The pause at the Florence County facility, which was slated to employ 1,600 workers and supply BMW's Spartanburg plant, underscores how shifting federal policies are creating turmoil in an industry that received billions in government support under the Biden administration.
AESC's decision comes as House Republicans passed Trump's "Big Beautiful Bill," which would phase out the $7,500 federal tax credit for new electric vehicles after 2025 and impose a $250 annual fee on EV owners12. The legislation also eliminates the $4,000 credit for used EVs and halts federal funding for charging infrastructure1.
"AESC has invested over $1 billion into the Florence facility, and we anticipate being able to resume construction once circumstances stabilize," company spokesman Brad Grantham said3. The company maintains its commitment to invest $1.6 billion and create 1,600 jobs but provided no timeline for resuming work4.
Governor Henry McMaster acknowledged the uncertainty surrounding increased tariffs and potential elimination of EV tax credits. "We regret to see this development, but a pause is acceptable," McMaster said. "We are simply advocating for caution"4.
The construction halt coincides with declining consumer interest in electric vehicles. According to an AAA survey released Wednesday, only 16% of Americans are likely to purchase an EV, the lowest percentage since 20191. The number reporting they would be "unlikely" to buy an electric vehicle increased from 51% in 2022 to 63%1.
Survey respondents cited high repair costs and vehicle prices as primary barriers, with EVs appearing unsuitable for long-distance travel1. J.D. Power projects EV market share will remain flat in 2025 due to policy uncertainty, despite battery electric vehicles reaching 9.1% market share in 20242.
The pause affects BMW's battery assembly plans in Woodruff, where the automaker has invested $700 million to integrate AESC cells into battery systems12. BMW spokesman Steve Wilson said the battery assembly plant remains on schedule to begin operations in 20261.
AESC previously canceled expansion plans in February, abandoning a second $1.5 billion facility that would have created 1,080 additional jobs2. South Carolina rescinded $111 million in state bonds allocated for that expansion3.
"We believe that, give it some time, and it'll work out," McMaster said2.
