AESC Group, headquartered in Yokohama, Japan, has halted construction of an electric vehicle (EV) battery cell manufacturing plant in the US due to political uncertainty and weakening market demand.
The US$ 1.6 billion facility had been under construction in Florence, South Carolina, to supply German automaker BMW’s nearby vehicle manufacturing operations from 2026. Local politicians have blamed the suspension of the project on the “potential discontinuation” of federal tax incentives for EV buyers and corporate tax incentives for manufacturers by the new US administration led by President Donald Trump.
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Chinese-owned AESC confirmed in a statement that “due to policy and market uncertainty, we are pausing construction at our South Carolina facility at this time.” The company said it will restart construction of the plant when market conditions become more favourable, without providing a possible new timeline.
AECS said it had already invested US$ 1 billion in the Florence plant, which was expected to directly employ some 1,600 workers. The company, which had previously also cancelled plans to build a second battery plant in South Carolina, also has a battery plant in operation in the US state of Tennessee and one under construction in Kentucky. It also has battery plants in China, Japan, France, Spain and Germany.
BMW confirmed that the suspension of the AESC plant will not affect its plans to build a battery pack assembly facility in Greer, South Carolina, which is scheduled to become operational in 2026.
AESC’s decision to suspend construction of the plant follows the high-profile opening of the company’s new battery cell manufacturing plant in Douai, France, earlier this month.
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By GlobalData
