- India is pushing for more electric vehicles on the road. The transitional tremors are expected to be felt strongly in the manufacturing sector of the automobile industry with many blue-collar jobs expected to become redundant.
- Experts assure that the conventional fuel-based vehicle market will continue to grow at least for another decade with very few jobs lost. The emerging electric vehicles sector is expected to create new green jobs.
- The slow shift to electric mobility provides enough time to plan and prepare for a just transition to e-mobility, better electric vehicle ecosystem and affordable electric vehicles.
In what could be deemed as an encouraging sign of India’s ambitious goal of decarbonising transport for a net zero future, the sales of electric vehicles crossed the two-million mark in 2022, as per the Ministry of Road Transport and Highways. Over a million electric vehicles were sold in 2022 alone, a sharp contrast from the 16,620 vehicles sold in 2019. Uttar Pradesh saw a 300 percent rise in electric vehicle registrations in 2022 from 2019 while Karnataka saw a 1500 percent rise in the same period.
Experts predict that the rising demand for electric mobility will eventually change the way the automobile industry functions, with several parts of the traditional automobile value chain, from manufacturing to sales and service sectors, becoming obsolete as the sector transitions to cater to electric mobility. The customary visits to the neighbourhood mechanic or to the emission testing kiosks, as is common for fuel-based vehicle owners, could wither with the growth of electric vehicles, although this scenario could be well into the future for India.
Engines, systems and jobs change with electric vehicles
“Most of us feel the transition to electric mobility is mostly powertrain change from conventional fuel engines to electric but in reality, most of the OEMs (Original Equipment Manufacturers) accomplish this transition by bringing the change in the other systems too, said Suresh D., CEO & CTO of Spark Minda, a leading auto component manufacturing company. “Many conventional mechanical subsystems will change to mechatronics, software or AI subsystems based,” he said.
Depending on the size and the category, an electric vehicle has only about two percent of the moving parts that a conventional internal combustion engine (ICE) vehicle has, say experts. This means a much lesser workforce is needed in the manufacturing sector of electric vehicles. Hence, a lot of the transitional tremors are expected to be felt on the manufacturing floors with many blue-collar jobs becoming redundant.
Considering India is still at the cusp of the transition, most speculations are drawn from the experiences of the western countries. Both the European Union and the U.S. reported significant job losses during the transition but that may not happen in India as it is an entirely different market, said Chaitanya Kanuri, senior programme manager of electric mobility at World Resources Institute. “There is a high vehicle ownership in the West with 800 vehicles per 1000 people. In India, however, it is 30-35 vehicles per 1000 people for cars and around 150 vehicles per 1000 people for two-wheelers,” said Kanuri.
The Indian automotive industry is the second largest in the world in terms of manufacturing output of two-wheelers and the sixth largest in passenger vehicles.
As per the Ministry of Heavy Industries, the contribution of the automotive sector to the national GDP has risen to about 7.1% from 2.77% in 1992-93 and provides direct and indirect employment to over 19 million people.
Despite push for EVs, fuel vehicle sector will continue to grow
A 2020 study by the public policy think tank Council on Energy, Environment and Water (CEEW), to determine the economic implications that a strong push to promote electric vehicles will have on the auto industry, explored a 30% electric vehicle penetration scenario by 2030 and found that the already robust ICE powertrain manufacturing sector will continue to grow despite a 30% electric vehicle transition. This would act as a shock absorber with few job losses and fewer additional ICE car powertrain jobs created.
“So far, we have no indicators for an absolute electric vehicle takeover or a complete reduction of ICEVs (conventional vehicles),” said Karthik Ganesan of CEEW who co-authored the paper. He said that the Indian market is such that even simple devices like LED bulbs haven’t been able to cross the barriers to dominate the market fully. A study found that despite the push for LED bulb usage through the government-led UJALA programme launched in 2014, 810 million incandescent bulbs were sold in 2016.
Indian roads are dominated by two-wheelers, with cars and other private transports claiming a market share of about 10-12%. “The demand for conventional ICE cars will continue to grow for another decade or so,” said Manoj Modani, director and EV Head at ATS, an automotive testing solutions provider. Only the railways have fully switched to electric. Two-wheelers are transitioning at a relatively fast pace. This will be followed by state road transports, then taxis and other public utility vehicles like buses and the last would be personal vehicles like cars, said Modani. This slow shift to electric mobility buys us time to plan ahead, develop necessary infrastructure like accessible charging stations and come up with shock-absorbent policies that aid a just transition.
Kanuri, however, warned that since some segments like two-wheelers that are seeing a faster transition and certain geographic locations where ICE vehicles manufacturing units are concentrated could witness more unemployment sooner. These realities need to be considered as we prepare to fully embrace electric mobility on roads.
Can a just transition be possible as we decarbonise transport?
A study conducted by Ernst & Young LLP titled Human Resources and Skill Development in the Automotive Sector (2026) points to three key trends affecting the Indian market the automotive sector needs to be cognizant of — the manufacturing trend of exponential technologies (those that double in capability or performance over a short period of time) leading to increased automation; displacement of low-skill work and requirement of high-skill work to manage these technologies; policy initiatives that focus on promoting environmentally sustainable technologies; and changing market demands for skills to respond to these shifts in trends.
There are strong speculations that the demand for electric vehicles would in fact lead to an uptick in green jobs, which, if leveraged, could help the industry navigate the change and make it work to its advantage. Suresh foresees an increase in demand for engineers in software, power electronics, computing, analytics and graphical user interface as against mechanical system design in the conventional ICE vehicles. Since the design of the vehicles will undergo a change with a smarter look and feel with smart access systems, better displays and interiors and cloud-connected features, the demand for engineering skills in new areas such as virtual reality designs, artificial intelligence programming, etc. is also projected to rise. Even the role of intermediaries like dealers and distributors will be replaced entirely by digital marketing and virtual reality concepts, he said.
The caveat, however, is that these green jobs are largely white-collared, concentrated in major cities. Upskilling and reskilling the rural workforce which is currently employed with the manufacturing facilities are potential solutions to help blue-collar jobs stay at pace with technology upgrades.
Most importantly, there is an urgent need to develop an electric vehicle ecosystem with easy access to charging points. “An electric vehicle needs to be charged exactly how a phone is charged — while resting. So, the idea of charging only at charging stations like fuel stations is redundant. Every parking space should be equipped with charging points,” Modani said. Equally crucial is to make the pricing of electric vehicles more competent and affordable for the average Indian middle class and an awareness among policymakers of timelines involved in building competence indigenously in manufacturing so as to make this transition more holistic.
Banner image: OLA Electric scooter manufacturing unit in Krishnagiri, Tamil Nadu. Photo by Gnoeee/Wikimedia Commons.