[Source/Observer Network, Pan Yuchen; Editor/Gao Shen] According to a report by The Wall Street Journal, due to the potential impact of Trump's tariffs and reduced federal subsidies, Envision AESC is suspending construction of its battery plant in Florence, South Carolina. Originally planned to supply batteries to BMW's electric vehicle plant in Woodruff, South Carolina, which was scheduled to begin construction in 2026 and start production in 2027.

An American executive of Envision AESC informed employees in a message on June 5th that, due to "economic uncertainty brought about by current federal policies and tax issues," construction of the plant has been suspended.

Knudt Flor, CEO of Envision AESC in the U.S. and Europe, stated that the company plans to complete the construction of the plant after the market stabilizes and becomes predictable. Envision AESC emphasized that it will fulfill its commitment to invest $1.6 billion (approximately RMB 11.5 billion) over the next few years and create 1,600 local jobs.

BMW Neue Klasse Electric Vehicle Wall Street Journal

In 2023, Envision AESC reached an agreement with BMW to build the factory at a cost of $1.6 billion. However, some current and former employees said that although the physical construction of the factory is nearing completion, the installation of equipment and assembly lines has stopped.

Some employees said that since most of these equipment are imported from China, if Envision AESC imports them now, it will face high tariffs.

Since April this year, the tariff fluctuations for Chinese imports into the U.S. have been significant, reaching up to 145% at one point. Subsequently, through the Joint Statement of the Sino-U.S. Geneva Economic and Trade Talks, the tariffs were significantly reduced. However, two other informed sources said that Trump recently announced tariffs on steel, aluminum, and machinery containing these metals, which would also increase costs for Envision AESC.

Another Envision AESC construction site in Kentucky, Visual China

In recent years, driven by subsidy bills such as Biden's Inflation Reduction Act, billions of dollars of investment have flowed into the construction of new battery factories. Many of these factories are located in the Midwest and Southeast of the U.S., later referred to as the "battery belt." However, with Trump's election, these subsidies have become targets for Republicans to cut, and regulations and tax credits aimed at promoting electric vehicle sales are also at risk.

In late May, the U.S. House of Representatives, where Republicans hold a majority, narrowly passed a large-scale tax and spending bill proposed by the Trump administration. The bill aims to cut approximately $500 billion (about RMB 3.6 trillion) in green energy tax credits under the Inflation Reduction Act and eliminate tax credits for electric vehicles and residential energy products.

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