Electric Car Boom in China Creates High Demand for Skilled Workers
Xing Wei graduated from a vocational high school in northeastern China in 2003 and began working as an electrician at an auto parts factory in the country’s south. Fast forward to today, and Mr. Xing now makes close to $60,000 a year working as a senior electrician installing industrial robots at electric car factories for Nio, a Chinese automaker. This lucrative shift in career comes amid a frenzy of construction and expansion of factories in China’s thriving electric vehicle market, making electricians and robotics specialists a hot commodity.
More than 1.5 million people now work at dozens of electric vehicle companies in China and their suppliers, with companies like BYD employing 570,000 workers. This boom has also created a shortfall in vocational training and led to a surplus of young people with university degrees who aren’t interested in factory work. The most in demand are skilled technicians and engineers, while assembly line workers at automotive plants earn less than half the salary of technicians like Mr. Xing.
This shortage is partly due to the slow realization and preparation for the scale of the electric car boom by the Chinese government, which estimated that in 2021 the country had more than twice as many jobs for skilled technicians as the actual number of qualified workers.
Today, the Chinese electric car industry is trying to use automation to fill the void. Companies are installing more industrial robots than the rest of the world combined, with Nio aiming to replace half its managerial positions with artificial intelligence and a third of its factory workers with robots by 2027. This approach, however, can only make up for some of the growing demand for factory technicians, and companies like Volkswagen are still struggling to fill positions for engineers and specialists developing electric cars.
This shift and demand in the labor market come amidst declining numbers of young people turning 18 each year in China and a sharp decrease in the number of teenagers entering vocational and technical high schools, being less interested in working in factory jobs due to perceptions that they are ‘dirty, dangerous, and demeaning’.
The boom also presents mixed results in the government’s goal to cultivate high-quality laborers and technical and skilled personnel, as more of the younger population aspire to pursue white-collar jobs and factory jobs continue to be associated with being less meaningful and fulfilling.
With the electric car sector flourishing, the labor shortage continues to escalate and has prompted a price war, leading many companies to invest in automation and robotics solutions while still struggling to recruit suitable relevant personnel.
The seeds of the labor shortage were planted years ago when the Chinese government failed to foresee the scale of the electric car boom and to train enough workers for it, which has led to an increased demand for skilled technicians and engineers in a labor market short on qualified workers.