Chinese company Automotive Energy Supply Corp. (AESC) has suspended construction of its battery factory in Florence, South Carolina. According to a Wall Street Journal report, the company cites economic uncertainties resulting from current U.S. federal policy and tax conditions as the reason for the halt. Construction of the plant began in 2023 after AESC had signed a supply contract with BMW. The facility was intended to supply battery cells for a new BMW factory in neighboring Woodruff, which is still scheduled to start production in 2026.
High tariffs on machinery, steel and aluminum
Although construction of the factory buildings in Florence is nearly complete, installation of the manufacturing equipment has been halted. According to current and former employees, one reason for the delay is increased import tariffs on Chinese machinery. Reportedly, most of the equipment was going to come from China. Since April, such imports have been subject to high tariffs, which had temporarily increased to as much as 145 percent. According to company sources, new tariffs on steel and aluminum components are exacerbating the economic burden.
AESC not giving up the plant yet
The AESC site is part of a series of large-scale projects in the Battery Belt region that have received subsidies from the United States government in recent years. However, the financial aid is increasingly up for debate. A current bill in the U.S. Congress would allow for the early termination of tax credits for battery manufacturers. AESC claims it still intends to complete the plant, but construction is not expected to finish until political and economic conditions have stabilized.
