Vestas CEO bracing for possible tariffs after US elections in 'pretty volatile world'

Vestas is preparing itself for possible new tariffs in the wind industry following the US elections, CEO Henrik Andersen made clear, but stressed that it cannot be predicted what form they may take.

Andersen didn’t want to comment on the possible outcome of today’s US elections “as we simply can’t predict it” and said the Danish wind turbine manufacturer will do everything it can to progress its current orders in the US until year-end.

“There is a general need and also demand is higher than supply right now for new green electrons, among other things to [supply] data centres.”

Andersen's comments came as US voters today are asked to vote for a new president, House of Representatives and part of the Senate in an election that according to opinion polls is too tight to call.

Andersen acknowledged that some contracts with clients include clauses for possible future tariffs, but didn’t give details on how many orders have those clauses or what share of possible tariffs may be passed on to clients.

“We have clauses, but simply don’t know in what format [tariffs may] come. Is it a tariff on components, is it on raw materials, or is it an isolation on something?”

The “world is different in terms of tariffs”, he stressed, adding that the current US administration also has imposed increasing tariffs, and even Europe has started to do so.

“Learning from the last two administrations in the US, it has become a more natural part, which is also why you try to exclude more and more volumes and more and more components from China when it is about the US.

That is also “also an underlying strength and support for our ramp-up of [Vestas' own] US factories, for exactly the same reasons,” Andersen said

“This is a pretty volatile world to execute projects in.”

Analysts at Deutsche Bank in a note today suggested that Vestas's US nacelle and blade facilities mean tariff risks for the company would be significantly mitigated. However, the bank said power convertors and rotor hubs could potentially be exposed given Vestas's production centres in Germany and China for those components.

"What I would say is we have a good setup in the US, where we have our facilities located around Colorado, and we believe we have a strong and good supply chain", he said.

There is always a risk for "these kinds of things" [possible future US tariffs], but Vestas will "will assess the situation as it moves forward," he added.

The company is still in the process of ramping up its production in the US, CEO Andersen said at the call, but added that the process hasn't been completed yet.

"If look down at order intake and deliveries, it is a steep ramp from where we came from," he said.