by Construction of Battery Plant in South Carolina Suspended
Rising tariffs are not only affecting political debates but are also changing companies’ plans for building new production capacities. Previous trade policy encouraged moving automobile production to the US but also led to increased car prices and chaos in the global market.
One of the latest victims of this situation is a $1.6 billion plant in South Carolina. Construction has been suspended even before production began.
Why Did AESC Halt the Project?
In 2023, AESC began construction of the plant to supply BMW with batteries, including for future models based on the Neue Klasse concepts. Although the construction of the buildings is almost complete, the installation of equipment and the launch of production have been halted.
Our goal is to complete the facility’s construction as soon as the market stabilizes, stated Knudt Flor, CEO of AESC in the US and Europe.
The company is facing high tariffs on importing equipment from China, as well as separate duties on steel and aluminum. This could significantly impact its costs.
AESC initially announced the investments during the Joe Biden administration, when the government provided substantial subsidies to attract battery manufacturers. However, these incentives are now under threat due to Republican Party proposals to cut funding for companies linked to China.
Despite the difficulties, AESC has confirmed its intentions to fulfill its commitments for $1.6 billion in investments and the creation of 1,600 jobs in the future.
This situation shows how political decisions can influence the strategies of large corporations. Delays in the plant’s launch could affect the pace of BMW’s transition to electric vehicles, especially considering the company’s plans for new models. It is expected that the stabilization of the legislative environment will allow AESC to resume work and reach planned production volumes.
