SC electric vehicle sales have risen slightly but tax credits for buyers are about to expire

SC electric vehicle sales have risen slightly but tax credits for buyers are about to expire

About 5,000 new electric vehicles and plug-in hybrids were sold in South Carolina during the first six months of 2025, a slight bump over the same time period last year, according to an annual report measuring EV adoption across the Southeast.

EVs and hybrids that can be plugged in to recharge made up a little more than 4% of total car sales in the Palmetto State in the first half of the year.

More than 32,000 all-electric vehicles are currently registered in the state, a fraction of the state's 3.5 million total registrations, according to data from the SC Department of Motor Vehicles. The number of registered plug-in hybrids was not immediately available.

While South Carolina has gone all in trying to lure major EV and battery manufacturers to the state over the past five years, it's next to last in the Southeast in terms of buyers, according to the sixth annual report put out by the Southern Alliance for Clean Energy.

"Florida continues to be above the national average in terms of its market share, but most of the rest of the Southeast is either at or below," said Nick Nigro, an analyst in Washington, D.C., whose firm, Atlas Public Policy, authored the report on behalf of the clean energy organization.

And a $7,500 tax credit aimed at lowering purchase costs and encouraging more U.S.-based manufacturing of these vehicles is about to expire at the end of the month.

EV sales across the country grew rapidly from 2020 to 2023. But despite continued sales growth overseas, U.S. sales have stalled out, holding steady at around 10% of the market.

"What will be the test for the near term in particular is what happens once that incentive goes away," Nigro said during an online presentation of the report. "Many are thinking it's going to crash the EV market."

But Nigro says not so fast. To qualify for those tax credits in 2025, customers had to buy vehicles with batteries made up of 60% North American-made components. The vehicle itself also had to be assembled in North America.

"If you look at the data, probably about less than half of the vehicles that were being sold last year even qualified for the credit," Nigro said. "So, a lot of vehicles were being purchased by Americans without the credit in place. Maybe it got them to the dealer, or maybe it helped them get more aware of EVs, but they were purchasing vehicles without the incentive."

Without the credit, Nigro does expect the already lagging adoption of EVs in the U.S. to continue or slow further.

Manufacturing in SC

In terms of South Carolina-made EVs, only Volvo's plant in Ridgeville has cars rolling off the line — though the assembly facility is only operating at about 13% capacity, according to industry estimates.

The Swedish automaker produces its EX90 and Polestar 3 SUVs in the Lowcountry. But the XC90 has seen minimal success, with just 10,900 sold globally in the first eight months of 2025.

In July, Volvo announced it would pivot to add the popular XC60 hybrid SUV to its line of South Carolina-made models.

Meanwhile, BMW in the Upstate isn't expected to begin producing its all-electric and hybrid iX5 until August 2026. The company has said it will offer six fully electric models by 2030.

Scout Motors, which is still constructing its $2 billion assembly plant in the Midlands, won't start making its electric trucks and SUVs until 2027.

The Volkswagen subsidiary announced Thursday that, in addition to the assembly plant, it is investing $300 million to construct three buildings on its massive site that will house several of its suppliers.

Of the deals it has inked so far with suppliers, Scout estimates those companies — which include firms both new and existing in the state — will invest $368 million and add 1,000 new jobs in the state to meet the automaker's needs.

Since 2020, companies have announced nearly $13.3 billion in investments for EV and battery manufacturing in the state, with an estimated 13,400 new jobs, according to the clean energy organization's report.

Those numbers had been higher, but the state suffered a setback earlier this year, when battery cell maker Envision AESC in February first dialed back its planned jobs and investments and then in June halted construction altogether.

The Japanese-headquartered firm already has invested more than $1 billion into its facility in Florence, said spokesman Brad Grantham. He said the company "fully intends to meet our commitments to invest $1.6 billion and create 1,600 jobs in the coming years," but did not indicate what the new timeline might be.

The company also pressed pause on a facility it's constructing in Bowling Green, Kentucky.

AESC continues to operate a smaller facility in Smyrna, Tennessee, but the plant has switched to making batteries for storing energy generated by wind and solar, the Wall Street Journal reported.

Gregg Robinson, Florence County's head of economic development, said the company continues to work through its issues, which include financing and cost increases driven by tariffs enacted this year by the Trump administration. The company is still contracted to supply battery cells for BMW's plant in Spartanburg County.

"There was no doubt there was going to be a natural slowdown as the manufacturing that was announced was being built and came online," Nigro said. "And there would eventually be some failures, because that's the normal course of business. The question we need to keep in mind as we look ahead is how many of these potential cancelations that are happening now and into the future are because of federal policy or just because of the normal cycle of business?"

Nigro also points out that, while consumer tax credits for electric vehicles are ending, a roughly 10% tax credit for the manufacturing of certain battery parts is still in place following passage of Republican's massive "big, beautiful" spending package. Phase outs begin in 2030.

"So, there is a signal that Washington wants a battery industry in this country," Nigro said. "It's just not exactly clear where we're going to put all those batteries."

Chargers in SC

South Carolina also remains behind the rest of the Southeast in terms of available electric vehicle chargers.

The state has 651 fast charging stations and 1,138 mid-level chargers, putting it at or near the bottom of the region in both categories on a per capita basis, according to the report.

But the state recently resubmitted plans to restart a federal program to increase its fast charger count.

South Carolina's designated share of the $5 billion total set aside by Congress during the Biden administration is nearly $70 million.

The state had yet to spend any of its money on chargers when the Trump administration froze the funding in February. In June, a federal judge ordered the freeze to be lifted and the Federal Highway Administration, in August, gave states a month to resubmit applications.