The Chinese-owned AESC Group is growing its foothold in the U.S. market by constructing two new electric vehicle (EV) battery plants in South Carolina and Kentucky, its chief technology officer said on Oct. 15.

AESC is a Japan-based EV battery manufacturer formerly owned by the Japanese carmaker Nissan. In 2019, Nissan sold 80 percent of its stake to the Chinese renewable energy company Envision Group.

In a recent interview with Nikkei Asia, Chief Technology Officer Hiroyuki Akashi said that AESC has "clear visibility" to expand its operations in the United States while working to meet the U.S. EV tax credit requirements.

Mr. Akashi said the company already operates a battery plant in the United States that supplies Nissan Motor, but its expansion efforts in the world's largest economy have not stopped there.

"We have not pressed the pause button [on plant construction]," he told the news outlet.

The Epoch Times has reached out to AESC for comments.

This follows AESC's groundbreaking ceremony in June for its new battery plant in Florence County, South Carolina. The factory is expected to start commercial operations in 2026 and generate 1,170 new jobs.

The 30-gigawatt-hour (GWh) plant, which costs around $810 million, builds on AESC's existing battery manufacturing network that includes an operational plant in Tennessee and another plant in Kentucky.

"Collectively, AESC's U.S. plants upon completion will provide up to 70 GWh capacity annually, powering the shift to electric vehicles with U.S.-made batteries and components," the company stated.

AESC announced on Sept. 14 the structural completion of its 30 GWh plant in the Kentucky Transpark in Bowling Green, Warren County, which is expected to power up to 300,000 vehicles annually by 2027.

Kentucky Governor Andy Beshear said during the groundbreaking ceremony last year that the $2 billion state-of-the-art EV battery gigafactory is expected to generate 2,000 new jobs in the region.

Inflation Reduction Act

The Inflation Reduction Act (IRA) requires EV batteries to have at least 40 percent of their core minerals sourced from North America or countries with free trade agreements with the United States to qualify for a tax credit.

Sen. Marco Rubio (R-Fla.) has earlier asked the Biden administration to stop EV tax credits from going to Chinese companies through their partnerships in South Korea.

Over the past months, Chinese companies have entered into collaboration projects with South Korean firms to build five battery materials plants valued at up to 5.6 trillion won ($4.4 billion). These deals were established to take advantage of South Korea’s free-trade agreement with the United States to qualify for EV tax credits under the IRA.

“Since the Democrat’s Inflation Reduction Act, I have been deeply concerned that China would benefit from American taxpayer dollars,” Mr. Rubio said in a statement emailed to The Epoch Times.

“Now, reports that Chinese firms are setting up partnerships in South Korea in order to qualify for Joe Biden and the Democrats’ EV tax credits prove those concerns are warranted.

“This is a clear attempt by the Chinese Communist Party to circumvent U.S. law and use American taxpayers’ money to expand its influence in Asia."

Prateek Biswas, a research analyst at Wood Mackenzie, a UK-based global energy research and consulting company, said that American consumers could use the clean vehicle tax credit of up to $7,500 per new qualified vehicle purchase if the China-South Korea partnerships are in joint ventures.

He said this is because the current definition of “foreign entity of concern” covers companies “owned by, controlled by, or subject to the jurisdiction of the Chinese government."

“Since the U.S. is proactively attempting to stem Chinese investments in critical mineral projects located in countries it is allied with, the upcoming rules will likely incorporate some sort of restrictions on partial Chinese company ownership,” Mr. Biswas told The Epoch Times.

Terri Wu and Eva Fu contributed to this report.