Electric vehicles' shift may cause 1.5 million job losses: Automotive Association

The shift from fuel-based vehicles to electric vehicles (EVs) is not going to be easy for India, because the first crisis will be huge job losses in the auto industry.

As many as 1.5 million people will be rendered unemployed in case of a sudden shift towards EVs, according to Automotive Component Manufacturers Association of India (ACMA). The report was first published in Livemint.

The association said that the move will give a jolt to the auto component suppliers when they are already making significant investments to shift to BS-VI technologies to be implemented in April 2020.

Such investments need to be amortized over a period of at least 10 years for a reasonable rate of return, the lobby group said.

After the government’s ambitious plan to make India an all electric vehicle country by 2030, several challenges are throwing up in auto industry.

The auto industry body has also conducted studies and offered suggestions to the government.

In a study by ACMA and German consulting firm Roland Berger, around 34 per cent of the two-wheelers plying on Indian roads can potentially be battery-run EVs by 2025.

It also requested the government to consider a gradual adoption of EVs, thereby promoting electrification of powertrains, rather than an abrupt shift to pure EVs.

According to another proposal by the Society of Indian Automobile Manufacturers (SIAM), 40 per cent of vehicles in India can be successfully shifted to fully electric powertrain by 2030.

In December last year, luxury carmaker Mercedes-Benz urged the government “not to rush with the all-electric vehicles push”.

It suggested the government should consider better technological options as the rest of the world is racing to run on hydrogen and not electricity.

The car manufacturer also called for adopting a less ambitious plan of promoting e-cars arguing that a nationwide electrification of the auto industry is just not commercially and technologically viable.

Last week, the government has finalised its think tank NITI Aayog to frame the policy for electric vehicles while all concerned ministries will implement them.

The framed programme will be headed by a mission director and NITI Aayog will act as coordinator.

Earlier this month, the minister of state for heavy industries Babul Supriyo said in a written reply in the Lok Sabha, “There are, at present, no plans under consideration of the Department of Heavy Industry to make all vehicles in the country powered by electricity by 2030.”

The response from Babul Supriyo was in complete contradiction to Union Minister Piyush Goyal’s statement, who earlier had told that India will be moving to an all-electric car fleet by 2030.