A BMW Supplier Was Working On A U.S. EV Battery Factory. Here’s Why Construction Stopped

• Japanese battery giant Envision AESC was building a massive battery plant in South Carolina to make cylindrical cells.
• BMW was its first U.S. customer. It planned to use these cells in its upcoming next-generation Neue Klasse EVs.
• AESC has now stopped the construction of the facility.

America’s electric vehicle battery industry was on the cusp of astronomical growth until early this year. But now billions in planned investments are running into roadblocks as regulatory hurdles and political pushback hit from all sides.

Like many other automakers, BMW might be affected.

Japanese battery giant Envision Automotive Energy Supply Corporation (AESC) started building a $1.6 billion battery factory in Florence, South Carolina back in June 2023. The 1,000-acre battery park was on track to generate more than 1,000 local high-paying manufacturing jobs and supply cells for BMW’s next-generation EVs. But two full years after construction began, the company announced work stoppage at the site on Thursday, several local media outlets have reported.

The company cited “policy and market uncertainty” as its reasons for halting construction.

BMW Envision AESC Cylindrical Battery Cells.jpg

Photo by: BMW

The timing is no coincidence. Automakers and battery companies are in a wait-and-watch mode as Congress considers passing the Trump administration’s signature spending bill. The legislation would eliminate federal EV tax credits for consumers and scrap billions in clean energy funding set aside under the Biden administration’s Inflation Reduction Act (IRA). The IRA had offered grants and loans to battery manufacturers to help offset the steep upfront costs of building out U.S. production.

Those plans are now in question as the administration continues its efforts to reverse years of progress. House Republicans passed the bill in May and now its fate is in the hands of the Senate, where it’s expected to undergo some amendments.

“Let things play out, because all of these changes are taking place,” Governor Henry McMaster of South Carolina said in a statement. “So, I’d say, relax if you can. We believe that, give it some time, and it’ll work out.”

Photo by: BMW

BMW did not comment on the production stoppage at AESC, but a company spokesperson told InsideEVs that its own battery plant in Woodruff, South Carolina, is still scheduled to start assembling high-voltage battery modules in 2026. The company had planned to source U.S. made cells from Envision for that facility, then send completed battery packs to its nearby production hub in Spartanburg. The company confirmed just last week that the iX5 and iX7 will be U.S.-made.

The first Neue Klasse SUV, likely an electric X3, is expected to break cover in the U.S. in September. It’ll be built in Hungary first, followed by Mexico in 2027—another plant that is expected to receive battery cells from Envision’s now-stalled South Carolina factory. With construction paused, it’s unclear how BMW plans to navigate the regulatory hurdles and keep its Neue Klasse plans on track. (BMW will also source cells from CATL.)

Photo by: BMW

The work stoppage at AESC’s South Carolina plant is just the latest in a string of billion-dollar clean energy projects slammed by policy uncertainty under the Trump administration’s agenda to dismantle Biden-era programs. Aspen Aerogels halted construction on its $1 billion Georgia plant earlier this year. The facility was set to produce fire suppressants for EV batteries. Around the same time, Kore Power shelved plans for its own $1 billion battery factory in Arizona.

However, the EV battery industry is still growing, albeit at a slower pace. Some projects have stalled and others that have been completed are adjusting their plans for lower output and the fallout from tariffs. 

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