South Carolina spent millions on Florence’s battery plant. Is it really worth the cost? (2024)

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  • By Seth Taylorstaylor@postandcourier.com

    Seth Taylor

    Seth Taylor covers Florence and the Pee Dee for The Post and Courier. Born in Iowa, he worked in Wyoming at the Buffalo Bulletin before moving to the Palmetto State.

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South Carolina spent millions on Florence’s battery plant. Is it really worth the cost? (3)

FLORENCE— The electric vehicle battery plant’s steel skeleton has begun to rise from the dust, workers swarming through the beams like ants.

With it comes the promise of a gleaming future for Florence and the Pee Dee— $3.2 billion in investment, 2,700 jobs, numerous new businesses, restaurants, homes, neighbors.

But is it really worth the cost?

Officials have spent hundreds of millions of dollars to lure the battery plant to Florence. They promise it will be a shot in the arm for the Pee Dee economy. But taxpayers have raised questions about why state and local officials have chosen to invest so much money in an unproven industry.

“We have to have faith in ourselves. We have to have faith in our state that we are investing in ourselves,” said Gregg Robinson, CEO of the Florence Economic Development Partnership that spearheaded the AESC project.

The 3 million-square foot “gigafactory” will produce lithium-ion batteries for BMW’s Spartanburg plant, as well as operations in Mexico.

Robinson and other local officials said the factory is a huge win for Florence County — the next generation in vehicle technology produced right here at home. He said the investment will be transformational, shaping Florence and the Pee Dee for decades to come.

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If the battery plant reaches its full potential, Florence could see a booming population, rising incomes, new amenities and more. It's common for officials to look toward Greenville when they talk about Florence's future.

But that's if the plant reaches its full potential.

“I have full faith in Americans and in the global market that in the next decade, and that's a 10-year plan, just like we did with other technology … we will adapt (to electric vehicles) and you will love it,” Robinson said.

So what have taxpayers spent on the battery plant, and will it be worth it?

How much will the battery plant cost taxpayers?

The promise of Florence’s battery plant is sizable. So is the price tag.

Between tax credits, government bonds, grant funding and other incentives, state and local governments have agreed to give AESC upward of $400 million, according to documents obtained by The Post and Courier.

Most of that money comes straight from the state, which has agreed to provide around $350 million for construction costs.

The South Carolina State Board for Technical and Comprehensive Education will use state funding to build a $22 million training facility for AESC.

In a letter to the company, readySC estimated that it is providing $8,000 worth of training for each eligible employee. If the organization trains all 2,700 people, that amounts to more than $30 million.

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Some state funding will go to Florence County and the city of Florence for infrastructure the two governments agreed to build at no cost to AESC. That work includes constructing a new road and expanding the water system and the sewer system.

Florence County Council members agreed to lock in AESC’s tax assessment rate at 4 percent for the next 40 years rather than 6 percent. The plant may end up paying even less than that due to numerous other tax credits.

The city and county also paid nearly $30 million to acquire the land on which AESC sits.

That’s not to mention the construction fees that the city and county have waived or reduced.

The battery plant’s announcement also forced the city to speed up a massive expansion of its water and sewer system to meet future demand.

That project, serving the entire city, will cost nearly half a billion dollars.

What will taxpayers get in return?

People want to know: Will Florence ever get a Publix?

They stop Robinson at the grocery store or church to ask the question, he said.

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“Everyone wants the thing that we don't have, right?” he said.

But Florence won’t see a Publix or businesses like it until it has the population— and the income— to support it.

“So how do we grow the discretionary income? Jobs,” Robinson said.

That’s what AESC promises: thousands more people with good wages who will be able to support future business in Florence. That should, in theory, increase quality of life for residents and the tax base for local governments, Robinson said.

While recruiting AESC came with a hefty price tag, the benefits of the battery plant will far outweigh the costs, he said.

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According to a cost-benefit analysis done for the county by an outside group, AESC could lead to $176 million net fiscal benefit for the county in the next 20 years. That’s if all three phases are built out. Two have been announced so far.

That means that for every $1 that the county invests in AESC, it will get back $8.44, according to the analysis that the county provided.

Using a more nebulous figure that estimates the impact of the developments that will surround AESC— ancillary businesses, new homes, new restaurants, new grocery stores— the county will see a return on investment of $91 for every $1 it invests into AESC.

Other agencies have done similar calculations as they estimate what the impact of the investments will be.

Michael Hemingway, Florence’s economic development and utility planning director, said city officials carefully evaluated the proposed costs and benefits before signing on to the battery plant.

Take the city’s water and sewer expansion. Florence has agreed to build water and sewer lines to supply AESC. That will cost the city about $18 million.

The city uses a 20-year timespan to determine if a project is worth the money. If Florence can break even within 20 years, it’s a good investment, Hemingway said.

Hemingway estimates that monthly water and sewer bills for AESC will be around $140,000, or $1.7 million a year. That means the city will collect more than $34 million in water and sewer revenue in the next 20 years, almost double its initial investment.

That’s well worth the cost, Hemingway said.

But the city uses more than math to make the eventual determination, he said. Staff ask if the company will benefit the community, if it will bring new industries to Florence, if it will diversify the workforce and bring more stability to the local economy.

“The water and sewer allow the initial ability for the industry to locate,” Hemingway said. “Now you get to spur all these other opportunities from that.”

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That’s what officials say is most exciting— not the plant, but what comes with the plant.

As people move to Florence to take new jobs, they’ll bring with them their families, Robinson said. They’ll buy homes, go to the grocery store every week, get a bite to eat at a local restaurant.

Local leaders anticipate suppliers will locate in Florence as well, hoping to piggyback off AESC’s success.

That means local business owners will rake in more revenue, which in turn means more tax dollars for the city and county.

Anticipation of growth has spurred efforts to put up guardrails, such as in eastern Florence, where AESC— and potentially thousands of workers— will soon be.

“With the introduction of the battery plant, it’s going to blow up. It’s really going to take off,” Shawn Brashear, the county’s director of planning, previously told The Post and Courier.

Many of the workers may want to live nearby. They’ll seek out subdivisions being built in surrounding farmland. With homes come groceries and retail stores. Then restaurants and entertainment.

It’s not just Florence either. AESC will need to draw from workforces across the Pee Dee if it wants to find the people the company said it needs to function.

People who move to the area to work at the plant may well end up living in Hartsville, Lake City or another city in the region, Robinson said.

In a recent interview, Florence mayor Teresa Myers Ervin said she believes AESC will position Florence to be a leader not only in the Pee Dee or South Carolina, but across the Southeast as well.

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Seth Taylor

Seth Taylor covers Florence and the Pee Dee for The Post and Courier. Born in Iowa, he worked in Wyoming at the Buffalo Bulletin before moving to the Palmetto State.

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South Carolina spent millions on Florence’s battery plant. Is it really worth the cost? (2024)

FAQs

What is the new battery company coming to Florence, SC? ›

COLUMBIA, S.C. – AESC, a world-leading battery technology company, today announced the expansion of its lithium-ion electric vehicle battery manufacturing operations in Florence County. The company's $1.5 billion investment will create 1,080 new jobs.

Where is the AESC battery located? ›

Incorporated and headquartered in Japan, the Company has a globally diversified platform with centers of innovation and major production facilities in the U.S., U.K., France, Spain, China and Japan. AESC has three large-scale battery plants operating or under construction in the US.

What company is making Tesla's new battery? ›

​What company makes Tesla's batteries? Tesla works with multiple battery suppliers, including Panasonic, its longtime partner, as well as LG Energy Solutions, the second largest battery supplier in the world. They supply the EV maker with cells containing nickel and cobalt.

What company is making the new super battery? ›

QuantumScape is a company that's working on solid-state batteries using lithium-metal. QuantumScape is attempting to reduce the costs and manufacturing complexity of forever batteries by implementing an anode-less cell design and a proprietary solid ceramic separator.

What company is behind the quantum battery? ›

QuantumScape is an American company that develops solid state lithium metal batteries for electric cars. The company is headquartered in San Jose, California and employs around 850 people. Investors include Bill Gates and Volkswagen. San Jose, California, U.S.

What is the next new battery technology? ›

Graphene batteries are viewed as a major upgrade to lithium-ion batteries and are expected to reshape the EV industry by the next decade. Everyday devices like smartphones and computers could also be equipped with graphene batteries to improve their performance.

What company is making the liquid battery? ›

Ambri Achieves UL 1973 Certification for Its Next Generation Liquid Metal™ Battery Cells.

Who does Microvast supply batteries to? ›

Microvast Selected by MAFI & TREPEL as Battery Supplier for Electric Tractors. Microvast's MV-C Gen 4 lithium-ion battery packs to power MAFI & TREPEL's Electric Terminal Tractor and Charger 380e Tractor.

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