When Sarvendra Pratap Singh enrolled in a B.Tech in Electrical Engineering in 2016, he did not anticipate that by the end of the course, he would be placed in a Lithium-ion battery manufacturing company for electric bikes. After all, with his course having no specific electives for battery engineering or other skills needed to be in the e-mobility space, Singh and his classmates didn’t see the electric vehicle (EV) industry as a probable job option. When the company arrived for campus placements, Singh went through the recruitment process and got selected.
“I learnt all the skills needed [for the EV industry], like battery engineering, while on the job,” says Singh, who has been working with the company for 2.5 years. Some of his colleagues, finding attraction in higher salaries and long-term growth, are now leaving this space to move towards data science. Singh is in two minds about leaving. “I find value in staying in this space, since there is a lot of push currently from the government towards e-vehicles, which could lead to more growth,” he says. India’s push can be seen in the form of the 13 states where policies dedicated to EVs have been approved and notified. “But, when I was in college, there were not many courses for EVs available. Even now, I have never gotten a call from a junior seeking recommendation to work in this space.”
Singh’s experience suggests a lack of awareness and availability for skilling in the EV space. It reveals a crucial gap—while the push for EVs is an encouraging and necessary step, how is India preparing to move employment opportunities towards electric vehicles, especially for those who lose their jobs in the conventional internal combustion engine (ICE) automobiles?
This question, which is now being termed as ‘just transitions’, highlights the need to ensure that greening the economy occurs in the most fair and inclusive way possible, leaving nobody behind. ‘Just transitions’ has become a key lens while discussing India’s shift to renewables from coal. Now, if we were to situate this approach within the transport sector, what are the socio-economic changes that would accompany this shift, and how can it be done in a just manner?
Greener, but Fewer Jobs in the EV Sector
“The rate at which this transition from ICE to EV occurs is of concern,” says Dr. Gopal Sarangi, faculty member, at TERI School of Advanced Studies. “A much faster rate of change would cause more employment disruptions in the short-run.” Sarangi recently co-authored a report, ‘All Change: Equitably Decarbonising India’s Transport Sector’, which highlights the need for a just and equitable transition to a low carbon transport system. “It is important to remember that the current automobile industry is largely occupied by informal employees, while the EV sector is emerging as a more formal workers space. We have to think of policy interventions for those informal employees who might lose their jobs in this transition,” Sarangi continues.
Putting Sarangi’s apprehensions to numbers, energy think-tank CEEW makes some intriguing estimates. They find that if the scenario continues as ‘business-as-usual’ —where the share of EVs is just 2%—a little over 5 lakh manufacturing jobs could be supported in both conventional automobiles and EVs by 2030. But if the share of EV increases to 30% by then, the jobs supported would surprisingly fall by 23-25%.
“Oil and gas are labour-intensive sectors and thus ICE vehicles generate higher employment. But in EVs, there are fewer moving parts,” Sarangi explains. As opposed to more than 2000 moving parts that are needed in an ICE vehicle, EVs are relatively simpler to build, requiring just 20 moving parts. These vehicles would also require lesser vehicle repairs and service, thereby hitting the smaller, informal employers the most as the transition occurs.
“This is why the pace of change needs to be in a slow and incremental manner, giving people the time to adapt and create capacities,” Sarangi adds. One way to ensure that the transition of employment in EVs occurs justly would be to encourage domestic manufacturing of EV parts.
Indigenising EV Parts, Creating Employment
Currently, India’s lithium-ion battery imports are almost entirely dependent on China and Hong Kong—96% of all these batteries are imported from the two countries. Lithium-ion batteries are also the most expensive component; they constitute about 40-50% of the cost of the electric vehicle. In contrast to this, over the years, India’s non-electric vehicle categories were able to reach close to 90% of indigenization; vehicle parts were being manufactured domestically. For smoothly transitioning a workforce dependent on this industry, a similar push for indigenisation of EV components can increase the otherwise limited employment avenues.
CEEW found that in the scenario wherein battery packs’ assembly can reach 30% indigenisation by 2030, 11,000 to 14,000 additional jobs could be created. However, the ability to create battery packs domestically goes hand in hand with developing skills required to do so. After all, the conventional ICE vehicles and EV have vastly different skills—when Ola Mobility Institute compared the skills between the two sectors across 35 roles of design, safety, aerodynamics, and automation, they found that only 14 roles overlapped; the rest—like battery safety, charging technology, wiring system amongst others— would need a different and new set of skills.
But this is easier said than done. “Now, slowly newer courses are being developed to garner skills for e-mobility, like the M.Tech in Electric Mobility at Indian Institute of Technology, (IIT) Delhi which was launched in 2021,” Singh says. “But these cannot be affordable for all.” The IIT-Delhi course that Singh refers to costs ₹2.29 lakh. In a bid to get better at his work, Singh has explored other diploma and certificate programs on various online platforms, but the price has deterred him.
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Such cost deterrents and lack of access to skilling courses has the threat of creating a talent-based hierarchy, which could create unequal benefits for those employed in this growing sector.
Ensuring Benefits Across Socio-Economic Tiers
The level of skilling—and who can have access to such opportunities—could reinforce inequity in an already existing socio-economic class divide. Within the auto sector, this plays out in a particular way. Auto sector employees broadly fall into those with a formal higher education, those with technical and vocational education and training, and those not in employment, education and training status. Usually, those with formal and vocational education aspire to join tier-1 auto component manufacturers and suppliers, while tier-3 and tier-4 component manufacturers and small-scale vehicle dealerships are compelled to rely on those who are not in employment or training status. This inequitable arrangement “creates a talent divide and hinders the ability of smaller players to achieve role and scale parity or pursue greater enmeshment into prevailing value chains,” the report by Ola Mobility Institute states. Despite a July 2022 report by The Ken referring to the Institute as Ola’s lobbyist arm, the report’s findings reinforce the need to make skilling options available and affordable, in line with what Singh mentioned.
Another aspect that could further deepen economic inequalities is the public financing of EVs. “The government is doing good work to subsidise two-, three-, and four-wheel electric vehicles to make them accessible. We have to start focusing on how these subsidies are being raised. Are they being cut from other development sectors?” asks Sarangi. “We cannot have a situation of subsidising the middle class at the cost of lower-income households.”
Indigenizing EV products through a skilled workforce will help transition towards a low carbon transport system, ensuring just socio-economic advantages. It also has a strong environmental motivation, since shifting towards EVs would reduce India’s heavy dependence on fossil fuel imports. But, there is more than what meets the eye.
Reducing Pollution or Relocating It?
CEEW estimated that in 2030, the import burden to the economy per ICE private car would be over ₹3 lakh, while that for an electric private car would be as low as around ₹90,000. But, a key question has escaped attention—where is the electricity required to charge the EV coming from?
“If the electricity is coming from renewable sources, then it becomes less complicated. But, in the case that electricity to charge the vehicle is coming from the coal-produced thermal power plants, then the shift to EV is counterproductive,” says Sarangi.
We can feel good about having numerous EVs in Delhi for instance, which may be reducing the city’s pollution, but if it is happening at the cost of pollution in a thermal power plant somewhere in Chhattisgarh, then it is only relocating the pollution, and not ending it.
In their report, Sarangi and other authors recommend policy actions considering both the electricity and transport sectors together, an aspect that they currently find missing in the policy push.
“We have to think of diversifying our energy mix. If it continues the way it exists, where our dependence on fossil fuels is around 70%, then more often than not, our EVs would be charged through fossil-fuel generated electricity,” Sarangi adds.
The transition towards a low-carbon transport system needs to be slow and incremental, accompanied by a closer look at the environmental advantages, policy interventions for minimal job losses, and preparing a skilled workforce for the upcoming sector of electric vehicles. A socio-economic lens will be key to ensuring equitable benefits across classes, especially in a sector like automobiles which has a large proportion of informal employees. Together, it will make low-carbon transportation an attractive space for Singh and many others, including those who would lose out on their jobs in the conventional automobile sector.
Featured image of Ather’s factory via Twitter