Electric vehicle battery manufacturer AESC has paused construction on its $1.6 billion battery cell facility in Florence County, South Carolina, citing “policy and market uncertainty” as the reason for the sudden decision.

In a statement released Tuesday, company spokesperson Brad Grantham said, “AESC will evaluate market conditions and anticipates it will resume construction once circumstances stabilize.”

Despite the pause, AESC emphasized its ongoing commitment to the project. “AESC fully intends to meet our commitments to invest $1.6 billion and create 1,600 jobs in the coming years,” Grantham added.

Construction began in 2023 after the Japan-based battery cell maker announced its initial plans in 2022 with an $810 million investment. Grantham noted that figure grew as “there were several project scope and size changes” over time.

In 2024, AESC unveiled plans for a significant $1.5 billion expansion that included a second facility at the same Florence County location. That site was intended to supply BMW’s assembly plant in San Luis Potosí, Mexico, where production of the Neue Klasse EV model is set to begin in 2027.

However, those expansion plans have now been shelved. AESC has formally withdrawn its application for the second facility and notified the South Carolina Department of Commerce that it no longer has a timeline in place for the project. “The company concluded that it could meet its customer’s demand with just one facility,” said Grantham.

The paused project adds to a growing list of clean energy and electric vehicle manufacturing initiatives that have been delayed, downsized, or canceled amid political and economic turbulence since President Donald Trump took office in January. Trump has consistently criticized the Inflation Reduction Act (IRA), the sweeping climate legislation passed in 2022 that spurred a wave of clean energy investments.

Since assuming office, Trump has frozen funding for IRA-related programs and ordered a full review of the law. Though a federal judge temporarily reinstated funding in April, the future of its tax credit incentives remains in flux. In May, the House passed a budget that cuts or phases out many of those credits.

As a result, companies have canceled or scaled back more than $14 billion in clean energy investments and 10,000 associated jobs so far this year, according to a report from environmental advocacy group E2. Among those canceled were Kore Power’s $1.2 billion lithium battery factory in Arizona and Stellantis’s $3.2 billion EV battery plant in Illinois.

AESC’s pause on the South Carolina project underscores how political shifts and legislative uncertainty are reverberating across the nation’s clean energy sector. The company has not provided an updated timeline for resuming construction.

Originally reported by Sara Samora in Manufacturing Dive.