Intel (NASDAQ:INTC) is working on a new vehicle solution, but runs into difficulties in Magdeburg

Things are actually looking better for Intel (INTC) as the company is working on a new collaboration and may be shutting down a manufacturing project in Germany. Investors welcomed the news, sending shares up nearly 3% on Monday afternoon.

Intel kicked things off with the announcement of a collaboration with Karma Automotive, in which the duo aims to develop a SDVA (Software Defined Vehicle Architecture) system that will help advance the automotive industry's path toward sustainable vehicle development.

The SDVA system will help consolidate a car's electrical systems. Rather than the usual approach of multiple electrical control units, it will now use a central set of computer systems to manage electrical operations. It will also help improve battery usage by redirecting functions such as camera monitoring to local control units. This development should be particularly beneficial for the electric vehicle market.

Trouble in Magdeburg

In Magdeburg, there are now signs that Intel's liquidity bottlenecks could be even greater than expected. According to reports, there are signs that Intel may ultimately abandon its plans for two new, very large chip manufacturing laboratories in the region.

Although Intel has long had a strong interest in developing manufacturing facilities – which should ultimately make the Magdeburg project secure – there is no denying that Intel has been cutting corners in a big way recently. The local government is therefore preparing a contingency plan in case Intel pulls out of the current agreement and is looking for a new “anchor investor” for the larger industrial park project.

What is the price target for Intel?

As for Wall Street, analysts have a consensus recommendation for INTC stock based on one buy recommendation, 24 hold recommendations, and five sell recommendations over the past three months, as shown in the chart below. After a 34.27% loss in the past year, INTC's average price target of $27.80 per share implies an upside potential of 29.79%.

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