India is entering a decisive phase in commercial vehicle transition. While electric trucks are gaining traction, a parallel reform is quietly reshaping fleet economics: the Vehicle Scrappage Policy.
For operators running old diesel trucks, this raises a critical question:
Can scrapping aging vehicles unlock real financial incentives to switch to electric trucks?
The answer is yes — when scrappage benefits are combined with EV subsidies under PM E-DRIVE and state-level concessions, the total cost of upgrading to an electric truck can drop significantly.
This guide explains everything fleet owners need to know: eligibility, incentives, process, real savings, and practical limitations.
What Is India’s Vehicle Scrappage Policy?
India’s Vehicle Scrappage Policy aims to remove old, polluting, and unsafe vehicles from the road and replace them with newer, cleaner technologies.
Key Objectives
- Reduce vehicular pollution and fuel wastage
- Improve road safety
- Promote adoption of cleaner vehicles including electric trucks
- Create a circular economy for metals and automotive components
Which Diesel Trucks Are Affected?
| Category | Rule |
|---|---|
| Commercial Vehicles (Trucks, Buses) | Mandatory fitness testing after 15 years |
| If Vehicle Fails Fitness Test | Declared End-of-Life Vehicle (ELV) |
| After ELV Declaration | Must be deregistered and scrapped |
| If Vehicle Passes | Can continue but with higher compliance costs |
Older diesel trucks generally:
- Fail emission benchmarks
- Have higher maintenance and downtime
- Face rising compliance and re-registration expenses
For many operators, scrapping becomes economically logical rather than repeatedly renewing unproductive assets.
What Financial Benefits Do You Get for Scrapping a Diesel Truck?
Scrapping does not simply remove a vehicle — it generates financial value when linked to replacement purchases.
1) Scrap Value
- Typically 4–6% of the ex-showroom price of a new equivalent vehicle
- Paid directly by the Registered Vehicle Scrapping Facility (RVSF)
2) Road Tax Rebate
- Many states offer up to 15% rebate on road tax for new commercial vehicles purchased using a scrappage certificate
3) Registration Fee Waiver
- New registration charges waived when scrappage certificate is submitted
4) OEM Exchange Benefits
- Several manufacturers provide additional dealer discounts for scrapped vehicles
These benefits apply whether you buy a diesel vehicle or an electric one — but the real advantage appears when combined with EV-specific subsidies.
EV Truck Subsidy Under PM E-DRIVE (Linked to Scrappage)
India’s PM E-DRIVE scheme supports the adoption of electric commercial vehicles, including trucks.
Why Scrappage Matters for EV Incentives
To claim EV truck incentives under PM E-DRIVE:
- You must submit a valid Certificate of Deposit from a scrapped vehicle
- Incentives are only released after scrappage proof
Subsidy Structure (Indicative)
| EV Truck Category | Approx. Subsidy |
|---|---|
| Light Electric Trucks (3.5–7.5T GVW) | Up to ₹2–3 lakh |
| Medium Electric Trucks | Up to ₹4–6 lakh |
| Heavy Electric Trucks (18–35T GVW) | Up to ₹9.6 lakh |
(Final amount depends on battery size, GVW class, and government caps.)
How Scrappage + EV Subsidy Work Together
Combined Benefit Stack
| Component | Benefit |
|---|---|
| Scrap Value | ~4–6% of vehicle price |
| Road Tax Rebate | Up to 15% |
| Registration Fee | Waived |
| PM E-DRIVE EV Subsidy | Up to ₹9.6 lakh |
| Lower Running Cost | 60–70% fuel savings |
| Maintenance Savings | No engine, clutch, gearbox |
Net Result: Lower upfront price + significantly reduced operating cost.
Step-by-Step Process to Scrap and Switch to Electric
Step 1: Check Eligibility
- Diesel truck older than 15 years
- Or fails fitness test at Automated Testing Station (ATS)
Step 2: Fitness Test
- Vehicle tested at authorized ATS
- If failed → declared End-of-Life Vehicle (ELV)
Step 3: Scrap at RVSF
- Hand over vehicle to Registered Vehicle Scrapping Facility
- Receive:
- Certificate of Deposit (CD)
- Scrap payment
Step 4: Purchase Electric Truck
- Submit scrappage certificate to dealer/OEM
- Claim:
- Road tax rebate
- Registration fee waiver
- PM E-DRIVE EV subsidy
Real Cost Example: Diesel vs Electric After Scrappage
Scenario
- Old diesel truck: 18 years old
- New vehicle: 7.5T electric truck
Cost Breakdown
| Item | Diesel Truck | Electric Truck |
|---|---|---|
| Base Price | ₹16 lakh | ₹22 lakh |
| Scrap Value | –₹0.8 lakh | –₹0.8 lakh |
| Road Tax Rebate | – | –₹2 lakh |
| Registration Fee | – | Waived |
| PM E-DRIVE Subsidy | – | –₹3 lakh |
| Net Effective Price | ₹15.2 lakh | ₹16.2 lakh |
5-Year Operating Cost
| Parameter | Diesel | Electric |
|---|---|---|
| Fuel / Energy | ₹18–20 lakh | ₹6–7 lakh |
| Maintenance | ₹5–6 lakh | ₹2–3 lakh |
| Downtime | High | Low |
| Total 5-Year Cost | ₹23–26 lakh | ₹8–10 lakh |
Conclusion: Even if upfront cost remains similar, lifecycle cost of EV is dramatically lower.
Why This Is a Strategic Move for Fleet Operators
1) Compliance with Future Regulations
Older diesel vehicles will face:
- Stricter emission norms
- Higher penalties
- Potential urban entry bans
2) Operating Cost Stability
Electric trucks:
- Eliminate diesel price volatility
- Reduce breakdown frequency
- Enable predictable cost per km
3) Corporate & ESG Advantages
Many logistics clients now prefer:
- Low-emission transport
- Green fleet certifications
- Carbon reporting compliance
Limitations You Must Consider
- Charging Infrastructure: Still limited on highways
- Payload Sensitivity: EV range reduces with heavy loads
- State-Wise Benefits: Road tax rebates differ by state
- Model Availability: Fewer options in heavy-duty EV trucks (for now)
Final Verdict
Yes — India’s scrappage policy can directly help diesel fleet owners switch to electric trucks at a lower cost.
When you combine:
- Scrap value
- Road tax and registration benefits
- PM E-DRIVE EV subsidies (up to ₹9.6 lakh)
- Massive fuel and maintenance savings
…the transition becomes financially viable, operationally efficient, and future-proof.
For aging fleets facing rising maintenance, compliance pressure, and fuel costs, scrap-to-EV is no longer just an environmental decision — it is a business strategy.
Frequently Asked Questions (FAQs)
1. Is scrapping mandatory for old diesel trucks in India?
Commercial vehicles older than 15 years must undergo a fitness test. If they fail, scrapping becomes mandatory.
2. Can I get EV subsidy without scrapping my old truck?
Under PM E-DRIVE, scrappage proof is required to claim electric truck incentives. Without scrapping, subsidies may not be available.
3. How much subsidy can I get on an electric truck in 2026?
Depending on GVW and battery capacity:
- Light trucks: ₹2–3 lakh
- Medium trucks: ₹4–6 lakh
- Heavy trucks: up to ₹9.6 lakh
4. Do all states offer road tax rebates on scrapped vehicles?
Most states offer rebates, but rates vary. Some provide up to 15%, while others offer partial waivers.
5. What documents are required for scrappage benefits?
- Certificate of Deposit from RVSF
- Old vehicle RC
- Owner KYC
- Invoice of new vehicle
6. Can I scrap a diesel truck and buy a diesel vehicle instead of EV?
Yes, but you will miss out on EV-specific subsidies. Financial advantage is significantly higher when switching to electric.
7. Is EV retrofitting covered under scrappage incentives?
No. Retrofitting is treated differently under homologation rules. Scrappage benefits apply to new vehicle purchases.
8. How long does the scrappage and incentive process take?
Typically:
- Fitness test: 1–2 days
- Scrapping & certificate: 3–7 days
- EV subsidy processing: As per OEM and government timelines
9. Are electric trucks suitable for highway logistics?
Currently best suited for:
- Urban logistics
- Hub-to-hub transport
- Municipal and fleet operations
Highway charging is improving but still developing.
10. Will scrappage incentives continue beyond 2026?
The scrappage framework is long-term. EV subsidy structures may evolve, but vehicle replacement incentives will remain central to India’s clean mobility strategy.
