Wind turbine troubles have sent one stock tumbling. There are fears it could be a much wider issue
A Siemens Gamesa blade factory on the banks of the River Humber in Hull, England on October 11, 2021.
PAUL ELLIS | AFP | Getty Images
Costly failures at wind turbine manufacturer Siemens Gamesa last month sent shares of parent company Siemens Energy tumbling, and analysts are concerned about wider teething problems across the industry.
The German energy giant scrapped its profit guidance in late June, citing a “substantial increase in failure rates of wind turbine components” at its wind division Siemens Gamesa.
Siemens Energy CEO Christian Bruch told journalists on a call Friday that “too much had been swept under the carpet” at Siemens Gamesa and that the quality issues were “more severe than [he] thought possible.”
Siemens Energy stock plunged by around 37% on June 23, while other wind companies also saw shares retreat as investors worried that the problems at Gamesa might be a symptom of a wider issue for the industry.
Nicholas Green, head of EU capital goods and industrial technology at AllianceBernstein, told CNBC that the pace of expansion, and the fact that many components of larger turbines haven’t actually been in use for very long, means there could be inherent risks throughout the sector.
“We have to acknowledge that putting brand new machinery — whether it’s on-shore or even more difficult off-shore wind farms — and the pace of change in that machinery has put us into slightly uncharted territory,” he said.
“Although it’s hard to tell at the moment, my best guess is that this probably actually is an industry-wide issue. It wasn’t that Siemens Gamesa is a bad operator as such, it’s that actually some of the normal protocols and time in use, operational data in use, is relatively limited.”
Siemens Gamesa’s board is now due to conduct an “extended technical review” into the issue, which is expected to incur costs in excess of 1 billion euros ($1.09 billion). The company’s shares have recouped some losses, but remain down over 33% in the last month.
A tough two years
The wind industry has expanded rapidly over the past two decades, lowering costs to rival — and sometimes undercut — those of fossil fuels, while boosting efficiency with ever-bigger turbines and reducing reliance on state subsidies.
“These cost reductions have been achieved with innovations in turbine technology and by pushing the boundaries of engineering,” Christoph Zipf, spokesman for industry body WindEurope, told CNBC via email.
He said that 20 years ago, a typical wind turbine would have 1 million watts of capacity; today, European original equipment manufacturers, or OEMs, are testing 15 MW turbines.
“This means that turbines have become bigger as well, posing challenges to components (quality, materials, longevity). The introduction of competitive auctions has also been a driving factor in this cost reduction,” Zipf added.
The Statistical Review of World Energy report published last week revealed that wind and solar power accounted for 12% of the world’s power generation last year, with wind power output increasing by 13.5%.
The industry was hit hard by the Covid-19 pandemic, as resulting lockdowns depressed industrial activity and reduced global energy demand. The ensuing supply chain problems then hampered OEMs.
These manufacturers have since endured a further shock from soaring inflation and input costs as Russia’s invasion of Ukraine disrupted markets and aggravated supply chain disruptions. WindEurope estimates that the rise in commodity prices has increased the price of wind turbines by up to 40% over the last two years.
“OEMs were sourcing some material from Russia (mostly nickel) and Ukraine (mostly steel). The price of both skyrocketed after the invasion. This comes on top of the challenging inflationary environment all European businesses are operating in (i.e. rising electricity prices, etc.),” Zipf explained.
“A main problem for the OEMs is that not all countries had indexed their renewables auctions. Consequently wind turbine orders were not necessarily indexed to inflation. The time between the order intake and the commissioning of a wind turbine can take up to 18 months (especially when supply of materials is short).”
However, Zipf denied that industry-wide technical failures could be on the horizon, insisting that “the problems at Siemens Gamesa are limited to Siemens Gamesa.”
“Big turbine failures are extremely rare given the number of turbines installed in Europe already. However, the competition in the sector is pushing OEMs to come up with bigger and better turbines at a fast rate, may be faster than in other sectors,” he said.
He also challenged the notion that the industry has entered “uncharted territory,” arguing that the changes in turbine technology have been “incremental and evolutionary.”
“Naturally every new turbine model comes with new challenges, requires rigorous testing and certification. But the European wind industry has overcome all of these challenges and maintained its reputation for delivering highly reliable high-quality turbines,” Zipf said.
Facts and figures
According to ONYX Insight, which monitors wind turbines and tracks over 14,000 across 30 countries, most turbines are designed and certified for 20 years but contain components that will fail during that time due to a “compromise between the cost of the system and reliability.”
“We have been aware for some time that turbine failure rates across the industry can — and should — be more widely understood, given the scale of their potential impact on the overall profitability of projects,” Evgenia Golysheva, vice president of strategy and marketing at ONYX, told CNBC.
“It’s not that they are made badly, but we now have a compromise between the cost of energy and targeted reliability. Everyone who builds, finances and operates wind turbines needs to have a realistic picture of how many failures to expect.”
In turbines built in 2023, more than 40% of gearboxes will need to be replaced after 20 years of project life, according to ONYX, along with over 20% of main bearings and more than 5% of blades.
Across the wind industry, around 65% of operations and maintenance costs are unplanned, according to ONYX. It projects that major corrective spending will rise to $4 billion by 2029.
“The growth of wind installations has been unprecedented, and the industry has had to scale up very quickly with little time to digest it. It’s not a capacity issue, and it’s not new, but it is good that OEMS (who are under pressure from supply chain and from inflation) are bringing this conversation into the public domain,” Golysheva explained.
“It’s a conversation that is overdue, because the underlying issues aren’t going away. For example, wind turbine rotors are getting bigger, the turbines are getting bigger, and the development cycles are short, so it’s crucial to have digital and other diagnostic tools to be able to deal with reliability issues.”
Kia owners were supposed to get access to Tesla Superchargers on January 15, but that timeline was recently delayed. Some owners had figured out a loophole to charge, but it turns out, that loophole is now closed.
It’s been a busy time for the North American EV industry’s transition to NACS, the charging standard originally advanced by Tesla and now standardized by SAE.
We’ve recently seen several brands added to the “coming soon” list, and even beyond that, VW and Honda have both made their own announcements that access is coming soon.
But this past couple weeks were supposed to be even busier, with Kia having previously planned to roll out Supercharger access on January 15th, according to an announcement the company made back in September. Unfortunately there was a delay, and Kia owners will have to wait until later this quarter for official support.
In the meantime, though, owners had found that you could trick the system into letting you charge by telling it that you have a Hyundai. Hyundai and Kia both build their EVs on the same E-GMP platform, so there are a lot of similarities between them.
Kia, like Hyundai, is also in the process of shipping some of the first vehicles with a native NACS port, with the 2025 EV6 including a native NACS port, much like the 2025 Ioniq 5 does. So this similarity seemed to be able to trick the Supercharger network, and Kia EV6s could charge on it for a little while, assuming use of a third-party adapter.
Last week, we reported on this loophole, and were hearing of many owners who had success charging.
But that method no longer works, according to several Kia owners. Now, when attempting to charge at a Tesla Supercharger with an EV6 and adapter, the Tesla app will tell you “Unknown error occurred – Your vehicle is not able to charge at Superchargers at this time.” This has been confirmed to be the case even on Supercharger sites that were previously working.
Probably one of the reasons for this is the use of third-party adapters. While third-party adapters are available, manufacturers are always wary when owners use non-verified equipment – especially when it’s related to the most expensive part of the car, the battery.
Kia themselves told us that “warranty coverage may be impacted by use of a third party or aftermarket adapter, and we expect to have our authorized version available in late Q1 2025” when we contacted them about our previous article (though we’re not sure how that would shake out legally – there are a lot of laws covering car warranties and what can and cannot void them).
This isn’t the first time we’ve seen some mix-ups with Supercharger access. Last November, Tesla announced that Nissan cars had access to Superchargers, but it turned out they jumped the gun. Everything is hunky-dory now for Nissan, and it seems like a bunch of new brands will gain access in the coming months, but we expect a few more fits and starts along the way (chaos tends to happen when you fire the whole Supercharger team for no reason).
But, once EV6s do gain access to Superchargers, we expect to see them show exceptional charge performance. The EV6’s cousin, the Ioniq 5, recently showed that it can charge faster than a Tesla, even on Tesla’s home turf. The EV6 should be able to accomplish similar feats, once it is unleashed onto North America’s biggest charging network.
If you’re looking to buy one of the fastest-charging EVs on the road today, use our link to check local dealers and get in line for when they get the new 2025 Kia EV6s in stock.
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Jaguar Land Rover’s investment arm InMotion Ventures has invested $2 million in rare earth magnets recycling company Cyclic Materials, bringing its Series B funding round to $55 million.
Jaguar Land Rover’s InMotion Ventures has invested in a range of technologies including supply chain traceability, battery repair, reuse and recycling, and now, rare earth magnets recycling.
“Cyclic Materials is leading the way in creating a sustainable supply chain for rare earth elements (REEs) and critical materials,” said Mike Smeed, managing director at InMotion Ventures. “Their innovative technologies address a vital need for rare earth magnets recycling, supporting the automotive industry’s transition toward a cleaner and more resilient future.”
Cyclic Materials says it will use the investment to accelerate the expansion of its operations across North America and Europe, boost its processing capabilities, and refine its recycling technologies.
This Series B extension builds on Cyclic Materials’ earlier $53 million round that already has the backing of BMWi, Microsoft, and Hitachi.
Rare earth magnet recycling
Rare earth magnets are a type of permanent magnet made from alloys of REEs, which are part of a set of 17 chemical elements in the periodic table. Rare earth magnets, particularly neodymium magnets, are essential in electric traction motors in EVs. Their strong magnetic fields help deliver high performance and efficiency, which extend an EV’s driving range and reduce battery load.
Rare earth magnets can also be found in everything from data centers and wind turbines to cell phones and power tools.
However, less than 1% of REEs are currently recycled, while the global demand already exceeds supply and is projected to grow threefold by 2030. Ontario-based Cyclic Materials says its proprietary MagCycle and REEPure technologies recycle REEs from a wide range of end-of-life products, establishing a circular supply chain for recycled Mixed Rare Earth Oxides.
Read more: Solar overtakes coal in the EU, and gas declines for 5th year running
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Nissan plans to buy 20 GWh of batteries from SK On, enough to power around 300,000 EVs to be sold in the US. However, after delaying EV production in the US again, when will the new EVs finally arrive?
Nissan revealed plans to invest $500 million in its Canton, Mississippi, plant almost three years ago to prepare the facility for its newest electric vehicles.
Production was initially set to begin in Canton this year, but Nissan pushed the start date back until 2026 last January with concerns over profitability and EV demand. According to the Madison County Journal, the company is now pushing the start date until 2028.
Just yesterday, an Automotive News report claimed Nissan was also canceling plans to build a smaller electric SUV in the US. The SUV was expected to sit between the LEAF and Ariya.
The smaller electric SUV was expected to be the fifth EV built in Canton, following a pair of Nissan and Infiniti electric sedans. Nissan spokesperson Brian Brockman said the company was focusing on other, more profitable projects that would see more demand.
Nissan to buy batteries from SK On for new EVs in the US
Despite the delays, the automaker is still expanding its supply chain in the US to prepare for the upcoming EVs.
A Nikkei report on Thursday claimed that Nissan secured a battery supply from SK On for EV models sold in the US. Nissan agreed to buy 20 GWh of batteries, or enough to power roughly 300,000 EVs.
The automaker will reportedly begin installing the new SK-supplied batteries by 2028, which is when it plans to start building EVs in the US.
Nissan’s battery supply deal comes as the company looks to establish a domestic supply chain for EVs in the US.
Although Nissan announced plans to team up with Honda in December to keep pace with EV leaders like BYD and Tesla, it doesn’t expect to realize any substantial benefits until around 2030.
Nissan Motor’s, including Infiniti’s, US market share has dropped 2.1% over the past five years to just 5.8%. In 2024, the automaker sold just over 31,000 electric vehicles in the US, including roughly 20,000 Ariya models and 11,000 LEAFs.
Honda, which began delivering the Prologue just last March based on GM’s Ultium platform, sold over 33,000 models last year.
The new battery supply deal is a start, but in 2028, Nissan will face an influx of new EV models with which it will have to compete.
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