Jeffrey Collins
COLOMBIA, S.C. (AP) – Japanese companies have stopped construction at a $1.6 billion factory in South Carolina to make batteries for electric BMWs, citing “policy and market uncertainty.”
Although Automotive Energy Supply Corp. did not specify what these issues were, the Republican governor of South Carolina said the company is dealing with potential losses in federal tax losses for electric vehicle buyers, incentives for EV companies, and tariff uncertainty from President Donald Trump’s administration.
“What we’re doing is to bring caution, and let things come true because all of these changes are happening,” Gov. Henry McMaster said.
The AESC announced on Thursday that the construction of the factory would be suspended in Florence.
“Due to policy and market uncertainty, we are currently suspending construction at our South Carolina facility,” the company’s statement said.
The AESC has pledged to resume construction, but not when, vowed to fulfill its commitment to hire 1,600 workers and investing $1.6 billion. The company said it has already invested $1 billion in its Florence factory.
The Japanese-based battery manufacturer also has facilities in China, the UK, France, Spain and Germany. In the US, AESC has a factory in Tennessee and is currently under construction in Kentucky. The statement did not mention any changes to other plants.
The South Carolina plant is supposed to sell battery cells to BMW, which is building its own battery assembly site near the giant car factory in Greer. BMW said the AESC suspension of construction will not change plans to open the plant in 2026.
The AESC is already rolling back plans for South Carolina. They announced their second factory on the Florence site, but later said earlier this year that their first factory should be able to handle BMW’s demand. This has led South Carolina officials to withdraw $111 million with the assistance they plan to provide.
The company still has a $135 million grant and $121 million bond from the South Carolina Department of Commerce, and the agency said a construction moratorium would not encourage them to curb the offer.
South Carolina has invested heavily in electric vehicles. Volkswagen-owned Scout Motors plans to invest $2 billion and hire 4,000 people to the plant to build a new electric SUV that is scheduled to open in 2027.
The state has been making big bets on foreign manufacturers like BMW, Michelin and Samsung for decades, rewarding this century economic boom, but there is fear that infidelity with Trump’s high tariffs could stumble or ruin those important partnerships.
McMaster told people to relax as state and business leaders are talking to the Trump administration.
“The goal of the president and administration is to have robust economic growth and prosperity, and there is a need for a change in international trade stance, and I’m sure President Trump is working on that,” McMaster told reporters Thursday.
Original issue: June 6, 2025, 12:41pm EDT
