Union Minister for Environment, Forest and Climate Change Bhupender Yadav’s push for green mobility to shift from the traditional ‘take-make-dispose’ model to a circular economy focused on reuse, recycling, and sustainable resource management makes sense, but this change will only be a goal if India can’t improve its formal recycling system to handle large-scale recoveries. Strengthening the electric mobility charging ecosystem is crucial for moving faster along the path of sustainable mobility, in addition to increasing the number of Registered Vehicle Scrapping Facilities (RVSF) across states and union territories. Currently, the country has 134 RVSFs with an annual capacity of dismantling and recycling 10,000 to 15,000 end-of-life vehicles (ELVs), but as of March, fewer than 5 lakh vehicles have been scrapped at these RVSFs when the number of ELVs is projected to increase to 50 million by 2030. The hesitation on the part of private investors in setting up more RVSFs stems from a lack of clarity on whether the life span of vehicles is to be determined by fitness level or age-based consideration. Private and commercial vehicle owners who oppose age-based lifespans have significantly influenced the vehicle scrappage policies of the central and state governments, particularly if the fitness level continues to meet the prescribed norms. Their primary argument is compelling and cannot be dismissed: if a vehicle is roadworthy, does not pollute, and meets all safety standards, then an age-based lifespan is a flawed decision. Offering better incentives can be expected to motivate vehicle owners to accept the age-based life span of their vehicles and volunteer to scrap them. RVSF calls for increasing the percentage of concession in motor vehicle tax for new vehicles registered against a certificate of deposit of old scrapable vehicles issued by RVSF to incentivise the voluntary scrapping of old vehicles. This proposal calls for the government initiating wide-ranging consultation with vehicle owners, especially private vehicle owners, to arrive at a consensus definition of ELVs to ensure their active participation in the circular economy. The central government can pragmatically share the burden and reimburse the states for their loss of revenue, as the states genuinely fear losing substantial revenue from motor vehicle tax if they increase the concessions. The testing facility must be robust and transparent to determine the fitness level of an old vehicle and boost vehicle owners’ confidence in the actual condition of their vehicles, whether on the road or lying idle. The primary concern over the non-expansion of the RVSF ecosystem is that most of the vehicles scrapped by owners are dismantled at informal scrapping units, raising the risks of environmental hazards from unscientific and unsafe handling of toxic fluids and non-biodegradable petroleum compounds that contaminate soil and underground water sources. The NITI Aayog’s recent report titled ‘Enhancing Circular Economy in End-of-Life Vehicles (ELVs), Waste Tyres and E-waste and Lithium-ion Batteries in India’ points out that consumers assess the trade-offs between formal and informal scrapping options, and the decision is often influenced by financial and operational considerations, as informal scrappers tend to offer higher prices compared to an RVSF. However, because informal scrappers do not issue a certificate of deposit, vehicle owners must continue paying taxes and are denied tax concessions for new vehicles purchased after scrapping the old ones, as deregistration at the VAHAN portal requires this certificate. Awareness alone cannot drive the scrapping of old vehicles at RVSF if the limited number of registered scrapping facilities leaves vehicle owners waiting a long time to obtain the certificate of deposit necessary for the deregistration of old vehicles and to avail themselves of tax concessions on new vehicles. The NITI Aayog report highlights the problem of low utilisation of RVSFs, which adversely impacts their business. “At 100% capacity utilisation, the RVSF model appears commercially viable with reasonable profit margins. However, current utilisation rates of RVSFs are reported to be below 20%, which significantly affects their financial viability,” the report adds, revealing a grim picture of the recycling pace in the formal vehicle scrapping sector. The top policy group suggests that information about vehicle scrapping should be shared regularly and clearly and that the role of registered scrapping facilities should be established among all important parties to solve the problem of few vehicles being sent to RVSFs. The NITI Aayog suggests that to help informal vehicle dismantling groups move to the formal sector, state governments should offer incentives like waiving past environmental fines and setting up government-run or public sector vehicle scrapping facilities in areas where private ones aren’t profitable, with the government or public sector covering the costs. This will greatly increase the number of registered scrapping facilities to improve the vehicle scrapping system. Making the regulatory framework of ELV management more vehicle-owner friendly is essential to improving compliance with scrapping policies.