# Preliminary research of labour conditions of workers in electric vehicles factories

## 1. Research background
In recent years, China's electric vehicle industry has developed rapidly, benefitting from conditions such as policy encouragement and its competitive pricing. According to the "Global Electric Vehicle Outlook (2022)" report, even if the supply chain has been hampered by the pandemic, the global sales of electric vehicles in 2022 still doubled compared with last year, reaching 6.6 million vehicles. Among them, the sales of electric vehicles in China accounted for half of the global sales growth, reaching 3.3 million, ranking first in the world .

New energy vehicles are mainly divided into pure electric vehicles, plug-in hybrid vehicles and hydrogen fuel cell vehicles . New energy vehicle factories are widely distributed in China, and are mainly located in the Yangtze River Delta and the Pearl River Delta, with pure electric vehicle production as the majority. Automobile production is generally semi-automated so productivity has been improved.

The State Council's "New Energy Vehicle Industry Development Plan (2021-2035)" vigorously advocates high-quality development of the new energy vehicle industry in order to cope with climate change, reducing fossil fuel consumption and carbon dioxide emissions. While the new energy vehicle industry is heavily supported by the state, how about the auto workers? This report is based on visits to four factories that mainly produce pure electric vehicles and plug-in hybrid electric vehicles. It documented the labour conditions of auto workers in the form of interviews and questionnaires, trying to understand the specific situation of front-line workers in the electric vehicle industry.

## 2. Methodology
The research took place in Guangzhou and Zhaoqing in the Pearl River Delta region. We’ve visited four factories with a variety of ownership structures: private, state-owned, and Sino-Japanese joint ventures. They mainly produce pure electric vehicles and plug-in hybrid electric vehicles. The research was conducted in the form of face-to-face interviews and questionnaires. A total of 50 valid questionnaires and 5 detailed interviews were conducted and collected.

## 3. Research findings
### Most of the front-line workers in the electric vehicle factories are young men. They mostly have high school education or above.
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<center>Fig. 1 Gender Ratio of Respondents</center>

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<center>Fig. 2 Age of Respondents</center>

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<center>Fig. 3 Respondents' Education Level</center>

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<center>Fig. 4 Work Time Arrangements of Respondents</center>
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From the data above, we can see that the electric vehicle industry tends to hire young males and workers who have graduated from high school. According to the interviews with workers, front-line workers are basically employed in technical positions, including handling parts, punching, welding, painting and assembly. 90% of the workers work in two shifts (day and night). Although the factory also employs some ordinary operators, due to the capital-intensive and technology-intensive nature of the automobile industry, electric vehicle factories have higher requirements for workers' physical ability, age, and professionalism.

### The majority of workers have signed labor contracts, and the income of most workers is above the middle level
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<center>Fig. 5 Labour Contract Status of Workers</center>

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<center>Fig. 6 Monthly Income of Workers</center> <br>

From the figure above, we can see that 90% of workers have labour contracts, 38% of workers earn 5,000-6,000 yuan a month (largest income group), and 22% of workers earn 6,000-7,000 yuan a month (second largest income group). Workers said that the difference in wages was mainly due to factors such as different working positions, work intensity and skill difference.

Regarding income, according to the Guangdong Provincial Statistical Yearbook 2022 , in 2021 households with an annual income of 40,839.11-60,156.03 yuan were classified as middle-income households, 60,156.03-98481.33 yuan upper middle-income households. From this standard, among the 50 questionnaires we’ve collected, 84% of auto workers earn more than 5,000 yuan a month (thus over 60,000 annually), which would bring them to the upper-middle income group even before factoring in spousal income.

In addition, according to the interviews, most of the workers who have just joined the factory are dispatch workers. They will become regular workers after an assessment, which could happen after 3 months to a year. Regular workers sign labour contracts with the factory, and dispatch workers sign labour contracts with dispatch companies. Both regular workers and dispatch workers have ‘five insurances and one housing fund’ (standard social insurance for Chinese workers) However, the rate submitted is based on the minimum wage (which is less than the legally required rate). As for other benefits, such as year-end bonuses, dispatch workers receive lower amounts. Among the five workers we’ve interviewed, four said that they would have a bonus monthly salary at the end of the year, and one said that they would have a year-end bonus.

### Overtime work is common
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<center>Fig. 7: Daily Overtime Hours of Workers in 50 Questionnaires</center><br>

The interviewed workers said that the signed labour contract stipulates an eight-hour working day, but overtime is still common. The monthly overtime is basically 50 hours. If there is no overtime, the wages are relatively low. The "Labour Contract Law" stipulates that monthly overtime hours shall not exceed 36 hours, but workers with a monthly income of more than 6,000 yuan generally work more than 60 hours of overtime a month. Workers said that due to the impact of the pandemic, the number of overtime hours varied. About 60% of the workers worked 2-3 hours of overtime on weekdays. But as to which month or season is the peak production time that requires the most overtime work, we are not able to learn the exact situation from the workers.

It is worth mentioning that during the pandemic, in order to deal with the instability of orders, factories generally adopted the "replacement shift" system (欠班制), that is, giving workers holidays when there were no orders. The management would then record the number of days off. Accordingly workers would need to make up with additional shifts arranged by management when orders resumed. Since workers were ‘paying back’ their shifts, this would not count as overtime. Workers complain that most of the ‘make-up shifts’ will be arranged on Saturdays or high-temperature days off. In this way, not only will they lose double wages for working on weekends, but the original high-temperature days off will also be cancelled. If the missed shifts cannot be made up, bonus will be deducted at the end of the year. Overall, the "replacement work" system not only reduces workers' overtime pay, but also cut into worker’s resting days. According to the Ministry of Human Resources and Social Security's "Notice on Properly Handling Labour Relations During the Epidemic Period (2020)" No. 5, for enterprises that implement the standard working hour system, it is not in compliance with the law to arrange employees to make up for the working hours during the pandemic. Apparently, the "replacement shift" system is illegal.
### Meals and accommodation
The four electric vehicle factories surveyed all provide accommodation. The dormitory is a room for four people. Water and electricity bills are shared equally. A worker in a state-owned factory said that if the workers in his factory are technicians or above, they can live in room for two. For the meals, the two Sino-Japanese joint venture factories give workers meal allowances, ranging from 300-500 yuan per month. The private factory directly provides lunch and dinner, and the state-owned factory includes breakfast and lunch for workers in the morning shift, dinner and midnight snacks for workers in the night shift.
### Occupational Health and Safety Check-ups
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<center>Fig. 8 Whether there is occupational safety and health training</center>

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<center>Fig. 9 Physical Examination of Workers Before Resignation</center><br>

Among the 50 questionnaires collected, 90% of the workers had received occupational safety and health training, and 80% of the workers had occupational health check-ups before leaving the job. Among the 5 workers we’ve interviewed, 4 said that the factory's physical examination is basically once a year. One of them responded that a worker in his factory who had been working in a welding position for about ten years was found to have pneumoconiosis, and finally the factory transferred him to work as a security guard in the industrial park. A worker said that his latest physical checkup showed no abnormalities, but because he worked on a paint production line, the unit was full of pungent chemicals and he was very worried about his long-term health. Another worker said that the unit he worked in was very noisy, which had caused his hearing loss.

### Resignation
Workers in the four factories surveyed all said that few workers leave their jobs voluntarily, and most of them are forced to leave, and the laid-off workers are in a weak position to negotiate for anything.

A worker in a Sino-Japanese joint venture factory said that, since 2017, his factory has dismissed more than 100 employees with 3-7 years of service due to management changes and personnel management. For every year they have worked, the factory would compensate the laid-off employees for 0.8 months of wages. Another worker in the Sino-Japanese joint venture said that he learned that a worker was laid off because he made an operational error that caused losses to the company. Even so, that worker was still compensated similarly under the scheme mentioned above.

Workers at the state-owned electric vehicle factory said that the number of orders for electric vehicles at the factory has increased in recent years, and the factory has been recruiting since the end of 2021. He has not heard of any layoffs at the factory.

For the surveyed private auto factories, workers said that although the factory kept recruiting, 50% of the employees in the international operation department were still laid off, and the company paid N+1 to the laid-off workers (i.e. one month’s salary for one year of work, plus one month's notice) and severance payment. Workers said that these employees were laid off because the sales of electric vehicles overseas have decreased due to the impact of the pandemic, and the company has adjusted its pace and direction of development. In addition, workers said that the factory was revealed to have broken the employment agreements of 20 fresh college graduates in March this year, and finally compensated each of the broken contracts 5,000 yuan in damages.

Overall, it can be seen that for the laid-off electric vehicle factory workers, they are still at a disadvantage in labour disputes. The factory can compensate workers according to the legal standard of N+1+severance pay, but in some cases they only get less (x0.8 instead of x1).

## 4. Analysis and discussion
### The impact of automation in the electric vehicle industry on employment
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<center>Fig. 10 Level of automation in the production line</center><br>

Among the 50 questionnaires collected, 78% of workers indicated that their production lines have been semi-automated. One of the workers in a Sino-Japanese joint venture factory said that with the fully automated production or semi-automated welding process, the number of workers on the entire production line has been greatly reduced. He expects that the number of workers in some production lines will be reduced 50%.

The skill requirements of workers in the EV industry seem set to eliminate most of the "low-educated, low-skilled" workers. However, in reality full automation still cannot cover 100% of production in the near future. Will industrial upgrading lead to shortages of technical jobs in the automotive industry? How would automation impact the working conditions of assembly line electric vehicles workers? Are different working processes automated at the same rate? These subtle questions are all worthy of further investigation.

### The labour process is strictly monitored
The five interviewed workers all said that cameras are installed in the assembly line. The management claimed the cameras would aid investigations in the cases of accidents. In fact, the labour process is also under strict surveillance. The schedule of two or three shifts on the assembly line keeps the entire assembly line "non-stop". It is common for workers to work overtime to increase production. In order to increase output and maximize efficiency and profits, workers must work intensely. In that case, close monitoring of the workers is necessary.

### Channels for resolving labour disputes are ineffective
For some disputes at work, such as fighting for allowances, day-offs, and other rights, workers can basically only report to their superiors or the labour administrative department. Workers said that some problems can be resolved, while others are left alone. A worker in a Sino-Japanese joint venture automobile factory said that his factory has a union. When he joined the factory a few years ago, he heard about the collective bargaining system. But now the union can't play any role. Besides providing employees with some benefits during festivals, the trade union not only cannot fight for workers rights. Instead workers who try to complain would be "interviewed", and their wages and promotions will suffer. It is quite obvious that the existing mechanism cannot effectively protect the legitimate rights and interests of workers.

## 5. Summary
According to this survey, compared with other labour-intensive industries, the electric vehicle industry seems to be more advanced in terms of automation. It favours the employment of young male labour force, and has higher requirements for the skills and age of workers.

Relatively high income is one of the important reasons for workers to join this industry. But even if workers are skilled, they can only be dispatched workers when they first enter the factories. It seems that their own skills cannot directly improve their bargaining power in the labour market or in the workplace. The relatively high income is only obtained through extremely high work intensity and long overtime hours. The overwhelming tendency to employ young men means that this industry requires physical strength. The extensive coverage of occupational health examinations also means that workers bear high risks of occupational diseases.

In the next few years, the electric vehicle industry would still be very promising. The concept of industrial development will be linked with terms like "green", "energy saving" and "carbon neutrality", something the state has long advocated, which set the foundation for the continued development of this industry.

In light of industrial upgrading, will the labour conditions be improved or worsened? Does the industry's requirements for educated and skilled workers mean that these workers are less replaceable? When the existing rights protection mechanism cannot protect the legitimate rights and interests of workers effectively, will workers explore other ways to increase their bargaining power and protect their rights?

And looking at the bigger picture, the rise of the electric vehicle industry would mean the relative decline of the traditional automobile industry. How are their workers compared to their counterparts in the electric vehicle industry? Would their conditions suffer as a result? Can they join the electric vehicle industry? Are there any problems for such a transition? With regard to this new industry, there are many issues that need to be investigated and this preliminary report can hardly answer many questions. But it can serve as a start.