AESC halts construction on $1.6B battery cell facility in South Carolina

Yahoo

a day ago

This story was originally published on Manufacturing Dive. To receive daily news and insights, subscribe to our free daily Manufacturing Dive newsletter.
Electric vehicle battery cell maker AESC is pausing construction of its $1.6 billion factory due to 'policy and market uncertainty,' company spokesperson Brad Grantham said in an emailed statement Tuesday
AESC will evaluate market conditions and anticipates it will 'resume construction once circumstances stabilize,' Grantham added.
'AESC fully intends to meet our commitments to invest $1.6 billion and create 1,600 jobs in the coming years,' Grantham said in a statement.
The project was initially announced in 2022 with a starting investment of $810 million. The investment increased as 'there were several project scope and size changes,' Grantham said. Construction on the facility began in 2023, according to the company's website.
The Japan-based EV battery maker announced plans in 2024 to expand the Florence County, South Carolina, site. AESC said it was investing $1.5 billion to build a second facility that will service BMW's assembly operations in San Luis Potosí, Mexico, where the automaker will build the next generation of its Neue Klasse EV model beginning in 2027.
However, AESC withdrew its plans for the second facility earlier this year, informing the state's Department of Commerce that it no longer has a fixed timeline for carrying out the project, according to State Fiscal Accountability Authority documents.
The company concluded that it could meet its customer's demand with just one facility, Grantham said.
AESC's project is a recent example in a series of stalled and canceled clean energy projects since President Donald Trump took office in January. Throughout his campaign and his second term, Trump has criticized the Inflation Reduction Act, which spurred a slew of clean energy project investments. Trump froze the legislation's funding for programs created by the IRA and ordered a review of the law when he came into office.
While a federal judge temporarily reinstated the funding in April, the future of the IRA's lucrative tax credits remains unclear. Many of the credits were cut or phased out in the proposed federal budget passed by the House of Representatives last month.
Companies have canceled or downsized more than $14 billion in investments and 10,000 new jobs in clean energy and clean vehicle factories between January and May, E2 reported last month.
Cancellations included lithium battery maker Kore Power's cancellation of its planned $1.2 billion factory in Arizona and Stellantis's $3.2 billion EV battery facility in Illinois.
Recommended Reading
AESC investing $1.5B to expand South Carolina operations