EV transition to impact auto component players, says report

CHENNAI: The transition from internal combustion engine (ICE) to electric vehicles (EVs) will make 45-84 per cent of parts, primarily powertrain components, obsolete impacting the manufacturers of such components, said a report released on Thursday. In addition, it will affect about 31 per cent of job roles, with nearly half of them becoming obsolete.

The study, titled ‘ICE to EV: Just Transition Roadmap for India’s Automobile Sector’ was prepared by the International Forum for Environment, Sustainability and Technology (iFOREST), a non-profit environmental think tank, in association with CII.

As per the report, the transition from ICE to EV will make about 90100 per cent of parts of the powertrain of an ICE vehicle obsolete depending on the vehicle type. This will have a significant impact on the business of auto component manufacturers, said the report.

The impact on MSMEs will also affect a large number of contractual and informal workers associated with these enterprises and also pose a significant impact on traditional job roles involving various workers. The report says about 31 per cent of the job roles will be affected, including 14 per cent that will become obsolete and 17 per cent that will require reskilling.

Maximum job roles will be affected in the manufacturing segment.

The national study is supplemented with six in-depth research reports on components, enterprises, clusters, and workforce on the impacts of the EV transition on India’s automobile businesses, workers, and the environment.

The report highlighted that Hosur, one of the auto clusters in Tamil Nadu, delving into the challenges and opportunities of transition to EVs for businesses, workers, and the environment at large. An analysis of 759 auto component manufacturers in the Hosur cluster showed that about 20 per cent would be highly or moderately impacted by the transition.

Most of these enterprises produce parts for ICE powertrain sub-assemblies. Further, of the 759 enterprises, MSMEs constitute 95 per cent. These enterprises remain particularly vulnerable, given their limited financial resources and capacity for technology adoption.

“Depending on the vehicle type, 4584 per cent of parts of the ICE vehicle, primarily powertrain components, will become obsolete due to the EV transition, impacting the manufacturers of such components. The number of job roles in the EV ecosystem will be 5 per cent higher than in the ICE vehicle ecosystem and require more educated and skilled workers. Jobs in the passenger vehicle manufacturing sector alone will double from 1.7 million in 2023-24 to 3.3-3.7 million in 2036-37,” the report said.

The report was launched by K Senthil Raj, MD, SIPCOT; Srivats Ram, chairman, CII TN, and MD, Wheels India; Srinivasan, senior advisor, EV, FaMe TN; Sriram Viji, chairman (southern region) ACMA, and MD, Brakes India; and TR Kesavan, president, MCCI & group, president, TAFE.