2 days ago
Govt asks auto industry for data to figure out poor response to vehicle scrapping
New Delhi: The ministry of road transport and highways has sought data from the Society of Indian Automobile Manufacturers (Siam) to understand why the country's vehicle-scrapping facilities are not getting adequate footfalls, according to two people aware of the development.
Vehicle-scrapping is dangled as an option for end-of-life vehicles that are said to be polluting. In Delhi, the country's largest car market, a petrol vehicle older than 15 years and a diesel vehicle more than 10 years old are required to be scrapped, as per a Supreme Court order.
'The ministry is seeking the industry's view on why scrapping has not taken off. There have been operational challenges with scrapping centres. They are not receiving adequate demand, and these issues need to be addressed," one person said, requesting to the road ministry's vehicle-scrapping portal, while almost all of the 170 scrapping facilities in the country are 'approved and operational," some only have 'approved" status and are yet to start functioning.
'The government is considering pushing vehicle-scrapping as a driver of decarbonisation. It gets older vehicles off the roads and newer cleaner vehicles on the roads. There should be more scrapping centres in the country and consultations with industry are currently on to understand the issues that these facilities face," said the second person, also speaking on condition of anonymity. The consultations took place earlier this month, the person added.
Email queries sent to the ministry and Siam remained unanswered till press scrapping of vehicles has become a key facet of policies to reduce carbon emissions. Delhi's end-of-life vehicle policy as well as the Centre's PM E-DRIVE (Electric Drive Revolution in Innovative Vehicle Enhancement) scheme to incentivise the purchase of electric trucks use scrapping to put old vehicles out of use and promote clean mobility.
Low returns
A key reason that scrapping facilities have low demand is because customers get low returns on scrapping old vehicles.'The ELV (end-of-life vehicle) scrapping centres in the country are not able to get enough vehicles for dismantling for better utilisation of the facilities installed and ELV dismantling centres operate on very thin margins," said IV Rao, distinguished fellow – transport and urban governance at The Energy and Research Institute (Teri), a public policy think is a key part of the ₹10,900 crore PM E-DRIVE scheme, which provides subsidies to encourage the purchase of electric trucks. The scheme has allocated ₹500 crore to incentivise over 5,500 zero-emission trucks, with about 1,100 trucks allotted to Delhi to combat the National Capital Region's air quality woes.
Consumers need a certificate from a scrapping facility to obtain the benefits under the scheme. For each truck, buyers are eligible to get a discount of ₹2.7-9.6, depending on the size of the to Rao of Teri, there are very few 'carrots' to attract consumers to vehicle-scrapping centres.
'There is no pull factor in the absence of any defined incentive for purchase of a new vehicle after surrendering the end-of-life vehicle for scrappage," he said.
Not all states have an ELV mandate, as is the case in Delhi. Additionally, vehicle scrapping is voluntary.
Vehicles are not always scrapped at the end of their registration period, which is typically 15 years for cars. Their life can be extended by getting a fitness certificate to run for a few more years.
Often, old vehicles change hands in resale markets. Most people turn to scrapping centres only when their vehicles can no longer get road fitness certificates. The scrapping facilities also provide fitness certificates – after checking passenger vehicles older than 20 years and commercial vehicles older than 15 years.
Deferred ban
The government's focus on scrapping centres also comes after the controversial Delhi end-of-life vehicles policy, which banned fuel for ELVs, was deferred to November after a public outcry.
Fuel emissions on Indian roads contribute significantly – about 12% – to pollution on Indian roads, according to the International Energy Agency. Road transport emissions are 'a key contributor to urban air pollution", according to the the world's third-largest automobile market by sales, was valued at $137.06 billion by market research firm Mordor Intelligence. India's FY25 vehicle sales topped 26.2 million, about 6.5% higher than 24.6 million in the previous fiscal, according to the central government's Vahan registry of vehicles.
