Bloom Spotlight Delaware

Bloom Energy plans to move some Delaware jobs to Mexico

Karl BakerBusiness, Headlines

BloomSpotlight Delaware

Repair operations for Bloom Boxes like this will be moved from Newark to Mexico later this year. Photo from Bloom Energy.

Bloom Energy, the fuel cell producer that a decade ago promised to revitalize the state’s manufacturing sector, announced last week that it will move a slice of its Newark operations to Mexico at the end of 2024.

The decision is one part of the California company’s plan to restructure amid increasing debt and continuous financial losses, according to its annual report to investors published last week.

Also in the investor report, Bloom stated that it lost more than $300 million last year, even while bringing in record revenue of $1.3 billion, primarily from the sale of its signature product – natural gas-powered fuel cells – which are manufactured or assembled in factories in Newark, California and South Korea.

Bloom has not revealed the number of Delaware employees that could be impacted by the move to Mexico, but noted that they will come from the department that repairs and refurbishes its fuel cells, which it calls Bloom Boxes.

Neither officials from Bloom Energy nor from Gov. John Carney’s office responded to requests to comment for this story.

Although the move to Mexico will likely impact only a small portion of its more than 750 Delaware workers, and none reportedly at its plant on the University of Delaware’s STAR Campus, Bloom’s announcement may prompt renewed skepticism from critics of a generous incentive package that state officials used to lure the company to Newark a decade ago.

It included millions of dollars in direct grants and, more importantly, a guaranteed stream of customers in the form of Delaware electricity ratepayers, who to this day are mandated to purchase more expensive Bloom electricity.

Weight bloomBloom’s move may also elicit fears that it is following the offshoring playbook of past American manufacturers.

But, Pavel Molchanov, an analyst who researches Bloom Energy for investors, said the company’s Delaware story is likely more complex.

Molchanov said Bloom has routinely shuffled its operations in past years and, despite its larger restructuring, he expects the company’s Delaware presence to grow.

When asked if the move to Mexico could be the first of many, Molchanov said Bloom needs highly skilled workers, which can be difficult to find outside of countries with long histories of complex manufacturing, such as the United States and South Korea.

“I think the presence in Delaware will ultimately expand, just not as quickly as would have been expected a couple of years ago,” said Molchanov, a research analyst at Raymond James & Associates, a Florida-based investment bank.

Bloom, hydrogen boom

Though it lost hundreds of millions of dollars last year, Bloom Energy today appears primed to capitalize on President Joe Biden’s plans to remake the mid-Atlantic region into a hub for hydrogen production.

The Silicon Valley-based company is a key member of a regional consortium of politically powerful firms with large presences in Delaware, Pennsylvania and New Jersey, called the Mid-Atlantic Clean Hydrogen Hub, or simply MACH2.

Last fall, Biden announced that the U.S. Department of Energy would award the consortium up to $750 million to help it build hydrogen production and distribution facilities in the region.

MACH2 is one of seven regional organizations scattered across the country that will receive the federal hydrogen money that Congress approved when passing the Inflation Reduction Act in the summer of 2022.

Months after Biden signed the bill into law, Bloom held a ribbon cutting ceremony at its Newark facility for an assembly line that will build hydrogen-producing devices, called electrolyzers.

Electrolyzers split water into its basic components of hydrogen and oxygen, allowing the former to be harvested for fuel.


Bloom held a ribbon cutting ceremony in 2022 at its Newark facility for an assembly line that will build hydrogen-producing devices, called electrolyzers.

Bloom claims its electrolyzers can pull hydrogen from water far more efficiently than conventional methods that use natural gas. Company officials also say it can be uniquely done using the excess heat created by factories and power plants, such as the Salem Nuclear Generating Station in New Jersey.

“Electrolyzers are intended for industrial customers – so steel mills, chemical plants, oil refineries, that sort of thing,” Molchanov said.

In January 2023, two months after the ribbon cutting at Newark, MACH2 formed as a nonprofit entity and Bloom was one of its founding members.

In last week’s annual report, Bloom said it had increased production capacity at its primary Newark factory in 2023, in part because of the new assembly line for electrolyzers.

“Our Delaware team celebrated its 10th anniversary, growing from one employee in 2013 to nearly 800 in 2023,” the company said in the investor report.

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Yet, increased production capacity does not guarantee new sales.

Molchanov notes that Bloom’s Delaware story has been further muddied by weak demand for its new line of electrolyzers.

While they may produce hydrogen efficiently, most companies still use natural gas to satisfy their hydrogen needs.

He called Biden’s hydrogen initiative “a good government program,” but said it remains unclear whether it would be enough to build a long-term market for Bloom’s electrolyzers.

“In North America, what’s called green hydrogen, which uses electrolyzers, needs to be subsidized,” he said.

In its note to shareholders last week, Bloom reported that nearly all of its product sales still come from its Bloom Box fuel cells.

The company also said it expects those sales to climb in the future because of the recent surge in interest in artificial intelligence. As AI gobbles up larger amounts of companies’ computing power, they will be required to build new data centers that will need their own off-grid electricity generators, such as Bloom Boxes, company officials said.

“Let me start with data centers, particularly AI data centers. For the last few months, my team and I have been engaged deeply with several leading companies in the AI space,” Bloom CEO KR Sridhar told Molchanov and other stock analysts in a call last week.

Bloom’s investor report noted that it expanded warehouse space in Delaware and California in order to store products that Sridhar expects to sell to customers, including the newly energy-hungry corporations.

But, the report added a caveat: If new customers don’t “materialize to the degree we anticipated, our liquidity and financial condition may be adversely impacted.”

If that is the case, it may be hard to borrow money again in the future, the company stated, adding, that “would have an adverse effect on our business, results of operations and financial condition.”

This story was produced by Spotlight Delaware, a community-powered, collaborative, nonprofit newsroom covering the First State. Learn more at


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