**Japanese Firm Suspends Construction of South Carolina Battery Plant Amid Policy Uncertainty**

A Japanese company, Automotive Energy Supply Corporation (AESC), has paused construction on a significant $1.6 billion battery factory in South Carolina. The decision, attributed to "policy and market uncertainty," has raised concerns about the future of electric vehicle (EV) development in the region.

Governor Henry McMaster of South Carolina pointed out that AESC's move could be influenced by potential changes in federal tax incentives for electric vehicle buyers and businesses, as well as uncertainties surrounding tariffs imposed under President Donald Trump’s administration. "What we're doing is urging caution – let things play out because all of these changes are taking place," McMaster commented.

AESC announced the suspension on Thursday and confirmed the decision in a statement. "Due to policy and market uncertainty, we are pausing construction at our South Carolina facility at this time," the company disclosed.

Despite halting the project, AESC reaffirmed its commitment to completing the factory eventually. Although a new construction timeline was not provided, the company vowed to uphold its promise of investing $1.6 billion and hiring 1,600 workers. According to AESC, approximately $1 billion has already been invested in the Florence plant.

AESC's global operations include facilities in Japan, China, the United Kingdom, France, Spain, and Germany. In the United States, the company has an active plant in Tennessee and is constructing another in Kentucky. However, the current suspension only applies to the South Carolina plant, leaving other projects unaffected.

BMW AG, which plans to source battery cells from the Florence facility for its battery assembly site near its Greer auto plant, stated the construction pause does not alter its plans to have its assembly plant operational by 2026.

Previously, AESC had scaled back its South Carolina project, retracting plans for a second facility, leading state officials to withdraw $111 million in planned assistance. Nonetheless, AESC will still receive $135 million in grants and $121 million in bonds from the South Carolina Department of Commerce, which indicated the construction halt would not impact these incentives.

South Carolina continues its substantial investment in the EV sector, proven by Volkswagen AG-owned Scout Motors’ commitment of over $4 billion to establish a plant aimed at producing electric SUVs by 2027 – a venture expected to create 10,000 jobs.

While the state enjoys economic benefits from foreign manufacturers like BMW, Michelin, and Samsung, there is growing apprehension over the potential effects of Trump’s tariff policies on these crucial partnerships. Governor McMaster reassured the public, stating that discussions with the Trump administration are ongoing, and emphasizing the president's goal for significant economic growth and prosperity.