Car industry supplier Bosch turns to heat pumps to escape combustion engine crisis

Technology company Bosch is betting on heat pumps to offset deepening problems in its automotive business, after the German engineering heavyweight posted its first loss since 2009 last year and announced 13,000 job cuts, newspaper Die Welt reported.

The Stuttgart-based company is one of the world's largest automotive suppliers and recorded a post-tax loss of 363 million euros in 2025, as demand shifted from conventional cars to EVs, weighing on its core combustion engine business.

Against the backdrop of sluggish progress in Germany's transition to cleaner heating, Bosch is expanding its heat pump offering, launching a model designed to allow homes to switch to climate-friendly heating without replacing radiators, windows or insulation — a barrier that has previously limited heat pump adoption in older buildings.

The company's climate and building technology revenue rose 13 percent to 8.5 billion euros in 2025, boosted by its acquisition of the heating and air conditioning businesses of Johnson Controls and Hitachi. Bosch, which recorded total sales of 91 billion euros last year, told Die Welt it expects sustained growth in the sector from 2027, particularly in North America.

Germany's buildings sector remains a problem for its climate targets. Heat pumps overtook gas boilers as the bestselling heating technology in 2025, with around 300,000 units sold. But sales of around 500,000 are needed to decarbonise the country's ageing housing stock in time for the country's 2045 climate neutrality target.

Germany's long-delayed reform of existing heating rules - the so-called Building Modernisation Act designed to replace the current Buildings Energy Act - will roll back obligations to replace a broken boiler with a climate-friendly system. The government will allow installations of new fossil fuel boilers, in what it has described as a "technology-neutral" approach to cutting emissions in the sector. The reform, which has drawn heavy criticism from environmentalists, is expected to be approved by cabinet in May.

Germany's Heat Pump Association said homeowner interest in the electric heating systems is growing, boosted partly by energy security concerns following the crisis in the Middle East, but warned that uncertainty over Germany's clean heating policy is suppressing demand.