by WANG Zhen

German engineering group Bosch is trimming parts of its traditional fuel and hydrogen operations in China, underscoring how the world's largest car market is forcing global suppliers to rethink long-standing technology bets.

People familiar with the matter said Bosch has been adjusting headcount and capacity at its Wuxi powertrain base since October 2024, affecting more than 100 frontline and engineering staff. The changes mainly involve internal combustion engine systems and hydrogen fuel cell projects.

XU Daquan, president of Bosch China, told Jiemian News the move represents normal "business adjustments" rather than layoffs, as the company reallocates resources in response to structural shifts in the market.

China's EV surge squeezes legacy supply chains

China's rapid electrification is reshaping the auto industry faster than in any other major economy. According to the China Passenger Car Association, new-energy vehicles accounted for 54.07% of passenger car retail sales in 2025, a level unmatched in Europe or the United States.

The shift is compressing demand for combustion-engine platforms, long the backbone of global Tier-1 suppliers. Joint-venture brands have been particularly exposed. Volkswagen's combined retail share in China fell to 10.9% in 2025, down from 12.2% a year earlier, reflecting weaker sales of traditional fuel models.

Upstream suppliers are already seeing the impact. Public filings from Weifu High-Technology Group, a long-time Bosch partner, show its fuel injection system revenue declined 8.52% year on year to 4.65 billion yuan in 2024.

Industry analysts say the downturn in combustion-related components is structural rather than cyclical, accelerating the reallocation of capital toward electrified and software-driven systems.

Hydrogen enthusiasm meets commercial reality

Bosch was an early mover in hydrogen fuel cells during the 2019–2022 policy push in China and Europe. In 2021, it opened a hydrogen fuel cell center in Wuxi and later announced a 1.13 billion yuan investment in local production of key components.

Hydrogen remains widely viewed as a potential solution for heavy-duty and commercial vehicles, but infrastructure gaps and reliance on policy support have slowed commercial rollout. Demonstration fleets, including 78 fuel-cell vehicles deployed in Wuxi last year, remain limited in scale.

Auto analyst MEI Songlin said that for global Tier-1 suppliers, hydrogen was a strategic move during a period of strong policy support, but short- and medium-term demand has yet to fully materialize.

The recalibration in China mirrors a broader reassessment of hydrogen timelines across Europe, where cost and infrastructure constraints have tempered earlier optimism.

Pivot to electrification and software

Bosch said it remains committed to China and will continue increasing investment, but its focus is tilting toward electrification, intelligent driving and software-enabled vehicle systems.

The company reported 149.8 billion yuan in China sales in 2025, up 4.9% year on year, with smart mobility emerging as the primary growth engine. Recruitment data show hiring concentrated in electric powertrain software, vehicle motion control algorithms and digital manufacturing, while conventional powertrain openings have narrowed.

For Bosch, the shift in China carries implications beyond a single market. As the world's largest and most dynamic EV market, China is increasingly reshaping technology priorities for multinational suppliers.

The challenge for traditional suppliers built around combustion engines is whether they can transition toward software-centric mobility systems, while remaining cost-competitive with China's vertically integrated EV makers.

Bosch's adjustments in Wuxi may be limited in scale, but they come amid a broader recalibration across the global automotive supply chain.