India File

Autoshock

Jinoy Jose P | Updated on July 15, 2019 Published on July 15, 2019

Given the shift to EV in a short span of time, a huge chunk of the workforce may have to be replaced   -  istock.com

The transition to electric vehicles cannot be rushed into without a master plan involving all stakeholders

Kannan Thiruchelvam understands things are getting bad in India’s auto industry. “Everybody tells me sales are down like there is no tomorrow and our jobs will be hit,” says the 52-year-old who works at an auto parts making unit near Chennai’s Padi industrial area. “And last week, our manager told me a major calamity is on the way, which will see all our jobs vanish into thin air, and this time, the factory might also fold up,” panics Thiruchelvam. “I worry about the small house I bought on loan recently as I may be forced into a distress sale.” Clearly, his manager was referring to the Centre’s reported plan to make the country’s transport vehicles fully-electrified, starting with three-wheelers (by 2023) and two-wheelers below 150 cc (by 2025).

Considering that automobile manufacturing accounts for about a half of overall manufacturing GDP in India (SIAM estimates), the Centre’s EV plan could cause a tectonic shift in the industry, triggering massive job losses, factory shutdowns and other crises. India’s auto industry is among the largest in the world, with sales of 51 lakh units minus two-wheelers in 2018-19 (over 2.62 crore including two-wheelers). So, it’s a huge disruption, though inevitable, since obituaries of the internal combustion engine and fossil-fuel powered transport are being written across the globe.

“It’s obvious that the gasoline-oriented auto sector will be impacted, but that’s an inevitability in the country’s transition towards electric energy-powered transport,” says Fredy K Thazhathu, Secretary, Trade Union Centre of India. “But what’s really damaging in this process is the way the Centre is planning this, without an overarching master plan that involves all the stakeholders in the automobile industry, including all kinds of producers and labourers.”

Such a massive transformation — and the impact it will have on allied sectors — will have drastic repercussions on the economy, at least for the short term.

“No one can predict the scale and this doesn’t augur well for an economy looking to balloon to $5 trillion in just about five years,” says V Kuppuswami, a senior member of trade union CITU in Chennai’s Otteri area. In India, where the combustion engine, especially in the two-wheeler and three-wheeler (autorickshaw) sector, has had an undeniable influence, the new changes can make for a bumpy ride, especially given that eight million people are directly employed in the manufacturing and services sector (which includes dealerships), which balloons to a total of 3-4 crore people, when one takes into account the ecosystem actors including petrol pumps, drivers, small finance companies (SIAM estimates).

There is general agreement among auto experts that in view of the Centre pushing the EV shift in a short span of time, re-skilling workers or re-modelling production will be a big ask and in all likelihood a huge chunk of the workforce (as big as 70-80 per cent, according to an analyst) will have to be replaced.

Fully-electrified vehicles still have issues in terms of mileage, pulling, cost, maintenance and sustainability. “That’s the main worry,” says T Thyagarajan, Chairman, Mudhra Fine Blanc, a Chennai-based auto parts supplier. “EV still needs a major breakthrough, but I am sure this is going to come sooner or later,” he says, adding that the industry should be prepared to face the epochal shift.

“There will be impact on the human element,” agrees Kaushik Madhavan, Vice-President, Mobility Practice, Frost & Sullivan. “But this is going to be a gradual shift. Alternative avenues and opportunities will arise as well.”

Amphibian stage

TUCI’s Thazhathu says that, at the moment, the Centre’s plan to force people to use EVs in five years is eerily reminiscent of Social Darwinism. This master plan should be, first and foremost, labour-inclusive. “Labour remodelling should be an integral part of this. The transfer of labour force from one mode of production to the other is possible only in a planned economy, not in a market economy.”

What can be done? The government must form a new panel including all auto manufacturing companies, labourers and other crucial stakeholders and devise a strategy to make the transition to EV smoother and sustainable, rather than forcing the change. “There must be an amphibian stage in this transition,” says Thazhathu. “That phase can begin by promoting hybrid vehicles.”

Trade union leader Ajit Abhyankar in Pune says a detailed study must be conducted on how the labour force will be affected because of the transition. “We have to closely study the scenario and understand its nitty gritty. If it is going to affect employability, what are we going to do with the people who will be out of the system because of lack of skills?” he poses.

Baba Kamble, President of Maharashtra Transport Panchayat, fears that workers will be out of jobs in a city like Pimpri-Chinchwad, which is a hub of auto and auto-ancillary industries. “ Thousands of people are working in the industry. Is the government going to take the responsibility of re-skilling all of them? What would be the stand of industrialists if workers need time to reskill themselves?” asked Baba Kamble.

The Society of Indian Automobile Manufacturer Association (SIAM) has informed the Ministry of Heavy Industries and Public Enterprises that industry engaged in the manufacture of parts related to engine, gearbox and some of the parts in the transmission system may get affected when electric vehicles fully replace conventional vehicles. SIAM would like electrification to happen in a manner that would allow the conventional technologies to co-exist for the next 20 years or so. The introduction of EVs could have an adverse impact on the forging industry, with 60 per cent of the units making auto components. The Ministry informed the Lok Sabha that that it has not received any representation to this effect from the forging industry.

“Indeed, EV is a very advanced tech but it’s still being improved at many levels. The fuel (battery and fuel cell) still forms the most expensive part of the system,” says Naved Narayanan, SGM, Head Automotive System, Robert Bosch Engineering. “Still, the batteries cannot be fully recycled, though research is improving in the area.”

India’s EV experience in the two-wheeler, three-wheeler segments has been a lukewarm affair so far even though sales of such vehicles have been spiking. “I bought a Hero Electric scooter in 2015 but had to abandon it in about a year,” says Paul Varghese, a sewing machine mechanic in Kerala’s Thrissur district.

“For my line of work, it wasn’t serving the purpose.” He used to get a lot of calls for work and soon, says Varghese, he realised the EV would not be able to take him everywhere the way he wanted. “It ran slow, could not carry more than one person, charging was a cumbersome affair and there were many glitches,” he says. Soon he bought a Honda Activa.

But EV experts say such blemishes are being fixed now and scooters are getting powerful. The EV is looking forward to share mobility space. Madhavan of Frost & Sullivan says there will be more investment on the shared mobility side and that will create more jobs. “The ideal way is to make sure the ecosystem is fully mature,” says Narayanan. “If the transition is done the right way, it can generate a lot of employment gradually and steadily.”

Entrepreneur Rahul Sharma is excited about his new venture RV 400, India’s first AI-enabled electric motorcycle. Sharma is confident that the workforce will have better opportunities.

“EVs offer up an incredible, once in a generation opportunity to reskill millions of workers to take part in the electric vehicle supply chain. It is not just about batteries, but also about motors, inverters, wiring etc. All of this requires extensive customising to reach mass scale for EVs. The sky is really the limit here as it relates to job growth potential.”

With inputs from Radheshyam Jadhav and Parvatha Vardhini C

Published on July 15, 2019
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