Bosch to invest $420 million to electrify its North American automotive business

According to foreign media reports, Bosch said on June 7 that it will invest $420 million in its North American automotive businessto prepare forelectrification amid many supply chain challenges.The investment will be used for machinery and equipment at its North American automotive operations plants, including in Charleston, South Carolina.

Bosch said it received about $11.8 billion in electrification-related new orders from customers around the world last year."As these projects come into play in the next four to five years, we have to be ready for it," Paul Thomas, Bosch's executive vice president for mobility solutions, said in a news release.

Bosch said sales in its North American automotive business would be $7.9 billion in 2021, up 5 percent from a year earlier.Bosch's North American automotive business posted revenue growth despite a series of supply chain challenges, including global semiconductor shortages, the adverse impact of the COVID-19 pandemic and rising raw material costs, posing significant challenges for the entire automotive industry.Thomas said the cost of some raw materials is now three times higher than in 2020, leading the company to raise the price of parts it sells to automakers.

But Bosch executives said the company is moving forward with investments in North American operations, especially as the automaker looks to further localize its supply chain after a difficult two years."There will certainly be many challenges ahead," said Mike Mansuetti, president of Bosch North America."But we remain optimistic about Bosch's prospects in North America, and we will continue to invest in the region."

Image credit: Bosch

While Bosch is investing in its electrification products, it is also betting heavily on the adoption of hydrogen fuel cell technology in the market.By 2024, Bosch will invest about $1 billion alone to develop fuel cells for mobility, and plans to invest about $600 million more in components for hydrogen electrolyzers, which split water into hydrogen and oxygen.

Currently, hydrogen fuel cell vehicles account for a small percentage of new vehicle sales in the United States, and hydrogen fueling infrastructure is still in its infancy.Still, Bosch sees growth opportunities in the heavy-duty commercial truck segment as automakers such as Nikola bring hydrogen fuel-cell trucks to market.

Bosch ranks first on Automotive News' Top 100 Global Auto Parts Suppliers list in 2021, with sales to global automakers of $46.52 billion in 2020.