Electric vehicle battery company halts construction of South Carolina manufacturing plant

BY: JESSICA HOLDMAN 

Gov. McMaster points to uncertainty in Washington, but urges people to “relax”

A battery cell maker is pausing work on its manufacturing plant under construction in the Pee Dee, delaying its pledge of 1,600 new jobs for South Carolinians.

Envision Automotive Energy Supply Co. (AESC) announced the work stoppage Thursday, two years after breaking ground on the facility near Florence.

“AESC has informed the state of South Carolina and our local partners that due to policy and market uncertainty, we are pausing construction at our South Carolina facility at this time,” spokesman Brad Grantham said in a statement. “We anticipate being able to resume construction once circumstances stabilize.”

The Japanese-headquartered firm already has invested more than $1 billion into the Florence facility, Grantham said.

He said the company “fully intends to meet our commitments to invest $1.6 billion and create 1,600 jobs in the coming years,” but did not indicate what the new timeline might be. The company declined to provide further comment.

Gov. Henry McMaster, while speaking to reporters, pointed to uncertainty in Washington, D.C., as a reason.

“We hate to see that happen, but a pause is OK,” he said, noting a temporary suspension last week at Volvo’s Lowcountry plant.

The staunch supporter of President Donald Trump said “there’s no doubt” that changes must be made to international trade policy, while recognizing the administration’s roller coaster tariff announcements will have an effect.

“The tariffs are going up and down, and some of those are being paused,” McMaster said.

He also addressed the uncertainty of what Republicans’ massive bill on taxes and spending will do for the electric vehicle industry. As passed by the U.S. House, the bill would eliminate electric vehicle tax credits, both for people who purchase new or used electric vehicles and those who install EV charging stations at their homes or business. It’s unclear what the Senate will do.

Regardless, McMaster said he’s confident that South Carolina’s economy, “despite all the ups and downs, is still going up, up, up.”

He said he’s communicating with South Carolina’s delegation, company officials, and the White House.

“Let things play out, because all of these changes are taking place,” the governor said. “So, I’d say, relax if you can. … We believe that, give it some time, and it’ll work out.”

The industry already wasn’t meeting early growth expectations before Trump took office.

However, electric vehicle sales have continued to rise, both nationally and globally.

But the lag in growth has led to multiple setbacks for the fledgling industry, with canceled investments both nationally and in the Palmetto State. Automakers have also eased away from goals of going all-electric in favor of a mix of electric and plug-in hybrids.

A repeal of consumer tax credits could further slow progress.

AESC’s pause comes just four months after the battery cell manufacturer pulled back on earlier plans to expand the plant beyond its original scope.

BMW contracted with AESC to produce battery cells for the German auto giant’s U.S. manufacturing facilities in the Upstate. The automaker has already invested $700 million dollars in its own battery plant in Woodruff, planning to place the cells it receives from AESC into the batteries it assembles there.

BMW spokesman Steve Wilson said those battery assembly plans are still on schedule to begin in 2026.

Between the initial announcement in 2022 and March 2024, AESC rolled out three separate rounds of investment and promises of jobs in Florence. In addition to supplying BMW’s Spartanburg County assembly plant, the company made plans for a second building that was supposed to produce battery cells for a BMW plant in Mexico.

But in February, AESC told the state the first factory would be enough to meet the demand for both of BMW’s facilities. It pulled out of plans for a second, $1.5 billion building, along with the 1,080 jobs that came with it.

In turn, South Carolina withdrew its offer of $111 million in state funding for that particular phase.

The incentives claw back was a rare move for the state. But even with the pull back, AESC’s remaining plant had still been on track to become the largest economic development deal in the Pee Dee region, according to the state Department of Commerce.

The remaining $121 million in bonds and $135 million in grants Commerce offered as an initial incentive to lure AESC to South Carolina are so far unaffected by the shutdown, Commerce spokeswoman Alex Clark.

“South Carolina is fully and unequivocally committed to supporting existing companies, including AESC,” Clark said.

Source: South Carolina Gazette