Supplier to Australia’s biggest battery project says Trump tariffs may mean lower prices for Australian projects

Another big battery supplier – this time the one building the biggest battery project in Australia – has warned that President Donald Trump’s tariff threats are effectively killing battery storage investments in US, but creating more competition and lower prices in other markets such as Australia.

Finish group Wärtsilä is supplying the battery modules for the giant 700 MW, 2,800 MWh Eraring battery in NSW which, when complete, will be the biggest in the country, adding to its growing portfolio of completed projects in Australia that already includes the Torrens Island battery in South Australia.

Late last week the company – which also specialises in thermal generators and marine engine systems – says the US market is facing significant headwinds due to the uncertainty around tariffs.

“The growth continues in other markets, but the competition is increasing, and putting pressure on profitability,” the company said in a statement, noting that Australia is one of its major markets outside the US.

Later, in a conference call with analysts, the company said orders were down 79 per cent in the latest quarter because of the uncertainty.

“We have a challenge with the volumes at the moment, the US market is stagnant, all competitors move to the more active markets and that, of course, increases competition,” said CEO Hakan Agnevall.

“Order intake was down 79%. That is quite a lot. Of course, the U.S. tariffs, the U.S. market is muted, competition increases in other markets. So our order intake has really taken a fall, no doubt.”

The conference call with analysts was completed before the US slapped a new 95 per cent tariff on imports of graphite, a key ingredient in EV and grid batteries.

Wärtsilä regards itself as one of the world’s top five battery storage suppliers, along with the likes of Tesla, Fluence, Sungrow and GE Vernova.

The US-based Fluence has previously warned of a billion dollar shortfall in orders this year as a result of the Trump tariff threats, and flagged that earnings this year could drop to zero, from previous guidance of around $US85 million.

“The evolving trade and tariff landscape has created significant uncertainty in the U.S. market, which has led us to agree with our customers during the second quarter to pause certain contracts both under execution and those we expected to sign until we have better visibility,” Fluence CEO Julian Nebreda said in May.

The Trump tariffs have already been cited as the main cause for the collapse of the Oregon-based Powin, which supplied the batteries to Akaysha’s 850 MW, 1680 MWh Waratah Super Battery in NSW, and the smaller Ulinda Park battery project in Queensland.

Wärtsilä’s noted in its comments that new entrants are entering the system integration market, of which batteries are a key component, and operating margins are already being crunched.

The Finnish company is also supplying batteries to AMP Energy’s Bungama battery in South Australia and has been selected to provide batteries to the Blind Creek solar and battery project in NSW.

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