Vestas 'better equipped to handle' latest US onshore wind twist than GE

The latest change to US President Donald Trump’s ‘One Big Beautiful Bill’ by the Senate significantly cutting onshore wind subsidies will be easier to stomach for Danish wind turbine manufacturer Vestas than for its closest rival in the US market, GE Renewables, Denmark’s Sydbank said.

The Senate’s latest text submitted for the bill increases the “risk of a significant and drastic decline in activity levels in the years after 2027 but may open up the possibility of a very high order intake from the US in 2025 and 2026 for Vestas,” Sydbank chief stocks analyst Jacob Pedersen said in a research note.

Vestas shares plunged by 5.89% to DKr97.36 ($15.30) in mid-morning trading at the Copenhagen Stock Exchange.

It is likely that the US bill regarding wind power subsidies will be adopted in the latest form, the analyst reckoned, although a further change cannot be ruled out as the bill now must return to the House of Representatives and be approved.

How that is interpreted exactly will be decisive for the level of activity in 2027 and 2028, Pedersen said.

‘Abrupt derailment of support’

“This puts the industry under massive pressure, and it is expected that a very high proportion of the projects in the pipeline that have not started before the new law is passed and cannot realistically be completed before the end of 2027 will have to be shelved.

“In that sense, it is a very abrupt derailment of support for the onshore wind industry.”

Vestas will have its order books for 2026 and 2027 in the US “filled to the breaking point, and this bodes well for order intake from the US towards the end of this year and well into 2026.”

A short-term obstacle to a high order intake, however, may be the lack of clarity about whether the use of components from “foreign entities” (best translated as unfriendly states) can exclude subsidies, the analyst cautioned.

As Vestas has some 7.5GW in its order book for construction through 2027, the OEM isn’t facing any acute activity or earnings crisis in the US, Sydbank thinks.

“The risk, when the projects after 2027 are to be built without a tax rebate, is sales price pressure – alternatively, electricity prices must increase significantly,” Pedersen said.

“Vestas should be better equipped to handle this than its competitor GE Vernova, due to its better earnings, and the deteriorating market conditions may also deter other competitors such as Nordex and Siemens Gamesa from expanding significantly in the US.”

Despite the current upheaval, Sydbank doesn’t expect the US onshore wind market will disappear after 2027, given the significant need for power by data centres and tech giants in coming years.

Still, while companies in the US are usually “skilled at navigating difficult conditions”, a much diminished market from 2028 on will make it very difficult for Vestas to meet its target for a 10% profit margin.

Sydbank nevertheless maintains its ‘buy’ recommendation for Vestas.