Wrong kind of talent – EVs stall as engineer supply dries up

Another day, another staffing crisis at Big Tech. Today, the EV sector.

Photo from CFP

Photo from CFP

By ZHOU Shuqi, WANG Yuezhu


ZHANG Zhiming works at an autonomous driving company, and is accustomed to getting a lot of calls from headhunters. From startups to giants, everyone is looking for algorithm engineers like him, or at least they used to. "I could spend entire afternoons on the phone with them if I wanted to," he said. But recently, his phone has been comparatively quiet.

Li Auto, Nio and Xpeng - the largest three Chinese EV makers – are trimming thousands of staff. New engineers are not getting along with old teams, the rumor goes, and they are paid too much. A headhunter even said on social media that “the priority right now is to keep your job.”

Keys to the city

LIN Qing, director at recruiter Hudon, said the EV industry is no longer rounding up talent indiscriminately. Companies are taking a moment to think about their weaknesses and how to make up for them. Traditional carmakers need internet talent; internet giants want car engineers. Everyone wants autonomous-driving algorithm engineers.

Overall, demand is only going up. Almost all of the 500 automotive executives surveyed recently said software engineers will comprise at least 40 percent of their workforce in the next five years. China’s EV industry is likely to face a shortage of 120,000 engineers within three years.

Last year, phone maker Xiaomi joined the race of EV making. Geely signed up with Baidu. Huawei and Didi both began their search for the EV Eldorado. Traditional carmakers are going electric. Benz plans to hire 10,000 software engineers. Volkswagen set up a China office for autonomous software. GWM is doubling its 15,000-person R&D force this year. Afraid of being left behind, the big three EV makers have joined in, expanding their combined workforce by 18,000.

ZHAO Weiyi, who now works at Nio, found himself surrounded by headhunters in July last year. After switching jobs twice, he is now paid twice as much as he used to be. Average salaries at EV makers went up 20 percent to 15,000 yuan (US$2,300) in 2021, but people in key engineering positions were offered much more. Zhao said a friend not only doubled his salary but got a much-coveted Shanghai hukou, or residency in his package. He himself offered 40,000 yuan a month to someone fresh out of college. The kid was unimpressed.

Upward mobility

Chaos, obviously, followed expansion. Thousands of inappropriate people found themselves in inappropriate non-jobs and the bonanza ended abruptly. On Weibo, someone who claimed to work at Li Auto said one of his boss's Q2 goals was to fire 15 percent of his group. XPeng is expected to let a third of its workers go. Li Auto and Xpeng deny the claims.

If you are unfortunate enough to find yourself in a job that doesn’t suit you, but with a salary that does, the smart career move is to trade yourself upward, as soon as possible. Hence, many poached senior engineers fail to deliver. "XPeng is a no-nonsense place. If you don't deliver, you are fired," Zhao said.

Fresh graduates who don't meet expectations don’t last very long. Corporate infighting is the new normal. Huawei and Xiaomi alumni clash with new hires from other hardware makers; both factions clash with old management. Xpeng's CEO HE Xiaopeng says his priority this year is to figure out how to maintain efficiency and avoid chaos while still growing.

Growth may not be the only pressing issue on his mind. Shareholders have endured years of heavy losses to bring the big three to mass production, and now they want a profit. It's not clear how to sell more cars, nor how to sell more expensive cars. Cost cutting is not straightforward either given the state of the global supply chain. Expensive workers are the easiest thing to cut. Li Auto will be the first of the big three to become profitable if it brings labor costs down. Sales and administrative costs at Li increased 212 percent last year.

"People who understand computer hardware don't know cars, people who know cars don't get algorithms. Any company that dabbles in the Internet of things needs people who know all three," said LI Jianqiu, dean of Tsinghua University's School of Vehicle and Mobility. There is no labor shortage in the industry as a whole, but there is a shortage for the most critical jobs.

Accidents will happen

It takes up to five years – about the time it takes to develop a new EV – to develop a graduate into a competent engineer, said Lin Qing. It can’t be rushed, and if it is, it is patently obvious that there are a great variety of accidents waiting to happen. For now, companies have to make the engineers willing to learn the internet business, or software engineers interested in cars.

Artificial intelligence is still a relatively new field, and AI experts are wanted everywhere. Likewise, chip engineers, as EV companies try to become self-sufficient. Top candidates are offered stocks and options on top of up to a million yuan in salary, and still companies struggle to hire.