India is capable of absorbing new technology superfast, then making it low cost and illegal (with little or no intervention from the government). The EV boom in Delhi is a great example of this as this entertaining & informative article from Suprakash Majumdar reveals. We would strongly recommend that you read the original article not least to see the photos of how Delhi’s massive illegal e-rickshaw infra operates. Mr Majumdar writes:

“Late last year, Delhi emerged as the leader in EV adoption in India: 11.5% of its vehicles were electric. This transition has been driven by Delhi’s “multi-segment adoption”, according to a report co-authored by the Federation of Indian Chambers of Commerce & Industry, a nongovernmental trade association. Studies show that a majority of the EVs operating in Delhi are e-rickshaws – lightweight three-wheelers used as shared transport for short rides.

Local government policies for EVs, however, have provided scant support for these vehicles, forcing e-rickshaw drivers to improvise with makeshift, illegal, and dangerous solutions. The informal ecosystem arose because Delhi’s current EV policy largely benefits four-wheelers, even though their adoption rate is much lower…”

Incredibly, 90% of Delhi’s e-rickshaws are “informal” i.e. illegal but they are fulfilling a large unmet need: “Despite forming a significant portion of Delhi’s EV ecosystem, most e-rickshaws “operate in the informal economy”, said Aravind Unni, an urban policy expert. “Since they largely cater to lower-income groups and last-mile connectivity, their inclusion requires policy measures that address informality, financing challenges, and infrastructural support, which the current policy fails to adequately tackle.”

Nearly 115,000 e-rickshaws were officially registered in Delhi as of December 2022. A more realistic number, including unregistered vehicles, is close to a million, Vighnesh Jha, a trade union leader who works with e-rickshaw drivers…”

As if the e-rickshaws being unregistered was not bad enough, the majority of these e-rickshaws are charged through power theft: “More than half are charged through power theft, leading to an annual loss of Rs 120 crore, officials from electricity distribution companies have claimed. Major utility companies in Delhi did not respond to Rest of World’s requests for comment.

Unauthorized charging stations are usually located within slum communities and informal settlements, or in warehouses, e-rickshaw drivers told Rest of World. Small-scale business owners or landlords operate the stations.

Rest of World visited an unauthorized station nestled within a narrow lane in south Delhi. At least 15 e-rickshaws were parked cheek by jowl. Two wires, loosely connected to each other, snaked out of an electrical outlet, slinking across a damp wall. They supplied electricity to a power strip, connected to a thick cord that charged an e-rickshaw parked over a water-filled pothole…

The owner of an illegal charging center in Delhi..told Rest of World he charges Rs 100 rupees for a full charge on an e-rickshaw, which can take up to six-seven hours. This is nearly double the regulated price in Delhi.”

In the meantime, the official charging stations are under-utilised because – wait for it – their facilities are incompatible with the adapters used to charge e-rickshaws. Naturally, the clever citizens of the capital city are asking rhetorical questions aplenty:

““Why wouldn’t we go to the public charging stations if they were for us?” Mahinder Kumar Vishwakarma, an e-rickshaw driver in his early 50s, told Rest of World. It would just be a matter of paying the government instead of those operating the unauthorized charging stations, he said.

The addition of a socket compatible with e-rickshaws at a public charging station is hardly complicated, Jha said. “The sockets are neither expensive nor logistically challenging. If they wanted to, they would have done it.””

In the meantime, lives are being lost as this anarchic situation plays out: “Part of the blame lies with e-rickshaw sellers and manufacturers who are supposed to provide an adapter that can work at public charging stations, Anil Chhikara, Delhi’s former deputy commissioner of transport, told Rest of World. But the government has not done enough to formulate clear, actionable guidelines for the regulation of e-rickshaws either, he said.

In August last year, a seven-year-old boy in northwest Delhi died after he came into contact with a live wire in an unauthorized e-rickshaw charging station. A month later, an e-rickshaw driver lost his life when he was electrocuted as he charged his vehicle. Such incidents occur frequently during the monsoon season, Chhikara said. “Fire accidents, electrocutions … it is risky.””

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Note: The above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. The information provided is intended for educational purposes only. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India (SEBI) and is also an FME (Non-Retail) with the International Financial Services Centres Authority (IFSCA) as a provider of Portfolio Management Services. Additionally, Marcellus is also registered with US Securities and Exchange Commission (“US SEC”) as an Investment Advisor.



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