Post by : Jyoti Gupta

Photo:AP

A Japanese company named AESC has stopped building a big battery factory in Florence, South Carolina. The factory was going to cost $1.6 billion and make batteries for electric BMW cars. But the company said it's putting the project on pause because there is too much uncertainty about government rules and the market right now.

Even though AESC didn’t say exactly what the problem is, South Carolina’s governor, Henry McMaster, said the company is worried about losing federal tax breaks and tariffs (extra taxes on goods from other countries) that might come back under former President Donald Trump if he becomes president again.

Governor McMaster told people not to worry and said that leaders are talking with Trump’s team to figure things out. He believes things will work out in the end.

AESC said they still plan to finish the factory later and will hire 1,600 workers. They’ve already spent $1 billion on the project.

The factory is supposed to supply battery cells to BMW, which is building its own battery plant nearby. BMW said this delay won’t change its plan to open its factory in 2026.

Earlier, AESC had talked about building a second factory at the site but then said one would be enough. Because of that, South Carolina took back $111 million in planned help, but the company is still getting $135 million in grants and $121 million in bonds from the state.

South Carolina is betting big on electric cars. For example, Scout Motors, owned by Volkswagen, plans to spend over $4 billion and hire 10,000 people to build electric SUVs by 2027.

The state has worked with big international companies like BMW, Samsung, and Michelin for years. But now, some people are worried that high tariffs could hurt those relationships.