Siemens Energy is setting its sights on a significant expansion of its US operations, with plans to begin producing large power transformers (LPTs) in the country by 2027. This move comes as the company seeks to navigate high import tariffs and meet growing demand for grid infrastructure, as reported by Reuters.
LPTs, bus-sized units crucial for adjusting voltage levels in grid transmission, are currently over 80% imported to the US, according to Siemens Energy board member Tim Holt. The company’s decision to localize production is a strategic response to this reliance on imports and the anticipated $2tn investment needed to update the US power grid by 2050. This forecast aligns with the projected surge in electricity demand, driven largely by the proliferation of data centres supporting AI technologies.
Holt expressed optimism about the market’s trajectory, stating, “This time we expect a longer boom cycle for grid expansion than the usual two to three years. The market is very positive right now.” Siemens Energy’s commitment to the US market is underscored by its significant presence there, with over a fifth of its sales and 12% of its 10,000-strong workforce based in the country.
The company’s chief financial officer, Maria Ferraro, reaffirmed this commitment, despite some firms re-evaluating their US operations due to trade tensions initiated under President Donald Trump’s administration. “Do we change our tactic or the way to approach the US? I would say no, because we already have a long-established basis there and it is a key market for us,” Ferraro stated.
However, the company’s calculations regarding the impact of US import tariffs on its net profits may need revisiting. In May 2025, Siemens estimated that these tariffs would have a minimal impact, amounting to less than €100m ($117m) by 2025. Yet, these projections were made before the emergence of threats regarding potential new levies on EU goods without a transatlantic trade agreement by 9 July. Ferraro noted that “any large change in the tariffs would also mean a review of our estimated impact.”
This development could significantly shape the future of the energy sector, particularly in terms of grid infrastructure and the localization of manufacturing. As Siemens Energy moves to expand its US footprint, it may set a precedent for other companies in the industry, potentially accelerating the pace of grid modernization and influencing trade policies. Moreover, the company’s long-term perspective on the US market could signal a sustained period of growth and investment in energy infrastructure, with implications for employment, technological innovation, and energy security.