German auto supplier Bosch and the U.S. Department of Commerce have reached a preliminary agreement to fund a silicon carbide (SiC) power semiconductor factory in California. With this agreement, Bosch would be granted $225 million in subsidies to build the facility. It would also receive $350 million in government loans to help with the project.
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Bosch is dedicating major funds to build the semiconductor facility, which will focus on producing chips used in the automotive industry. These chips will be important to electric vehicles (EVs) as they increase driving and charging efficiencies. The company says government funding is required to create the facility, which needs $1.9 billion to be completed.
What This Means for Bosch
If all goes well and this preliminary deal is finalized, it will grant Bosch the ability to open its plant in 2026. The plant is a focus for the company after it ran into supply issues during the COVID-19 pandemic. Once the facility is fully operational, it could account for more than 40% of SiC production in the U.S.
While Bosch is expanding operations in the U.S., things aren’t going as well for its workers in Germany. The company has announced layoffs that could result in 10,000 job cuts in its home country. For the record, Bosch employs 135,000 people in Germany.
Is Bosch Stock a Buy, Sell, or Hold?
There’s not enough analyst coverage of Bosch stock, which trades on the National Stock Exchange of India Limited (NSE) under the BOSCHLTD ticker. Instead, investors must rely on the company’s performance to determine its value. Shares are up 64.25% year-to-date, while its 2023 revenue grew 8% to 91.6 billion euros. However, Bosch chairman Stefan Hartung warned that its 2024 revenue would be below this as the European auto industry faces headwinds.
With that warning in mind, investors might better spend their money on other EV investments. A quick comparison below gives investors an idea of the top EV stocks to consider a stake in.
