From its German origins in Karl Benz’ Motorwagen in 1886 through the Fordist Assembly line of the 20th century, the car and the larger automobile industry has played a central role in steering the wealth of countries in many ways. Driven by changing aspirations and technological disruption, the growth and, by extension, evolution of the industry has resulted in an increase in domestic production, job and value creation.
There exists a tacit acknowledgment of the prominent role that the auto sector plays in the economic output of the country - comprising about half of the manufacturing GDP and seven per cent of the overall GDP in India. Additionally, this sector employs over 35 million of India’s workforce both directly and indirectly, attesting to the huge footprint it has in livelihood creation.
In spite of this, the ability of this sector to continue supporting such a large proportion of employment in India’s manufacturing sector is being called to scrutiny, the most sobering statistic being that nearly 350,000 people have been laid off due to the decline in auto sales for ten consecutive months.
The reason behind this is attributed majorly to two paradigm shifts: The scheduled leapfrogging to BS VI norms for emission control and the thrust on Electric Vehicles (EVs) to achieve high electrification by 2030. On the contrary, we find that on the road to a sustainable future, plenty of green jobs in general and EV jobs in particular, exist.
EVs are sustainable as long as their fuel sources are non-polluting and replenishable; the renewable energy (RE) sector holds enormous promise as a parallel feeder.
A recent ILO report estimated that the RE sector in India could alone create 3.8 million jobs by 2030. An IndiaSpend study also found that the sector created 47,000 new jobs in 2018, employing 4,32,000 Indians and this figure excluded large hydropower projects. By extension, this illustrates how green jobs can propel the Indian economy.
Additionally, it is well worth noting that a competing ecosystem has been created by entrepreneurial initiatives on the EV pathway. Ather energy is planning to set up a manufacturing unit in south India with an investment to the tune of $50 - $100 million dollars and Mahindra Electric invested Rs 100 crore last year for a manufacturing plant in Bengaluru. These are only two of the many examples from a range of players who are bullish about this sector. This healthy mix of new-age start-ups and legacy Original Equipment Manufacturers (OEMs) showing interest in the technology of the future also provides the necessary impetus to drive skilling initiatives. EVs will breathe a new lease of life into skilled workers in the auto industry and cushion them from becoming dated or obsolete.
Similar to that of the mobile phone industry, the transition from ICE (Internal Combustion Engine) vehicles to EVs will have its share of challenges but there exists undisputed opportunities in this shift. The advent of smartphones made several existing phones almost obsolete but also created behemoths out of companies that pivoted their strategy in time to align with new technologies. This not only generated jobs in that sector but also led to several other value added services being weaved around it creating a chain of new employment and new companies (e.g. spectrum improvement, video streaming, e-commerce, financial payments, etc). Disruption almost inevitably leads to a new, fast-growing market with more opportunities being created on the way; the question is how ready we are to embrace this disruption in the auto industry.
Countries like China, Europe, and the US see EVs as one of the fastest-growing job-creating industries, and India ought to take a cue from these economies. As the hub for automobile manufacturing in South Asia and the fourth largest auto market in the world, India has an ecosystem that can be a strong launchpad to transition to EVs and be a leader. The world is turning towards EVs and we need to grab the opportunity to train and upskill the 35 million or so workers to take advantage of the market.
According to a government blueprint, the EV sector in India is expected to create 10 million jobs in the near future. A few such avenues of job creation in the EV domain are design & testing, wiring harnesses, manufacturing and management, sales, services, technology for battery, automation, smart mobility, infrastructure for charging/swapping, and making existing building infrastructure EV-ready.
The government’s push and incentives for local manufacturing will help create an indigenous EV supply chain in the country. Now with the lower tax rate of 15% on new manufacturing companies, private investment will certainly inch forward. This will lead to manufacturing of tropical EVs and batteries, which are suitable for the Indian environment.
Retrofitting existing vehicles will unlock further job opportunities, which will need a good knowledge of ICE technology, and provide a platform for existing ICE technicians to upskill themselves.
Further research and innovation in chemical & materials engineering and mineral mining will open up more opportunities for the sector. Many states in India like Uttar Pradesh, Telangana, Tamil Nadu, Kerala have already taken steps to redesign the curriculum for engineering, polytechnic colleges and ITIs to suit the EV industry requirements.
The existing workforce transition will need a clear strategy and careful hand-holding. It is also necessary to remember that new jobs facilitated by EV adoption replace existing jobs, rather than completely displace them. As mentioned, existing skill set in the auto industry can be applied in these redefined, value added job roles brought on by clean and futuristic EV tech.
To promote initiatives for new jobs, the government has come up with supportive policies like FAME to accelerate the market and is also creating a programme to cater to the workforce demand from the e-mobility industry. The Ministry of Skill Development and Entrepreneurship is leading this effort along with key stakeholders from Automotive Skill Development Council, Power Sector Skill Council, and ARAI to create EV- specific occupational standards. Skill India mission is also planning to start new courses on EVs in collaboration with top multinational and Indian firms.
These efforts are all direct to the fulfilment of the EV goals set by India, including at the international level. Working in tandem to achieve these will be a win for not just the automobile sector but it will also positively impact skilling levels among India’s youth.
Getting the policy right during this transition phase, be it in skilling, or in developing technology and infrastructure, will further facilitate the process. The phased switch to EVs will undoubtedly ring in days of prosperity for the country at large and all actors in the system must work towards the realisation of this ambitious target.
It would also be a suitable agenda point in the endeavour for the $5 trillion economy by 2025, as envisioned by this administration. The future of clean mobility technology is decidedly EV and the industry, government and other stakeholders should work together to transition India’s massive workforce to jobs of the future.
Authors are experts in renewable energy, mobility and development