What is a automated vehicle scrapping recycling project report?
An automated vehicle scrapping recycling project report is a detailed project report (DPR) for a Registered Vehicle Scrapping Facility (RVSF). It covers how end-of-life vehicles are bought, depolluted, dismantled and baled, the machinery and approvals needed, and the project cost, five-year projections, DSCR and break-even a bank checks before lending.
Promoters use it to size the yard and apply for registration and a term loan; lenders use it to judge whether vehicle intake and scrap prices can repay the loan.
Also known as: RVSF project report, vehicle scrapping plant project report, car scrapping business plan, end-of-life vehicle recycling DPR.
What a bank checks in a vehicle scrapping project
A scrapping facility buys its raw material one vehicle at a time and sells most of it as steel scrap, so lenders look hard at the margin between the two. These are the values in our sample report and why each one matters.
Buying end-of-life vehicles takes most of every rupee earned. A report that pays owners less than informal yards do will look profitable but will not get vehicles.
Gas, absorbents and cutting consumables are the rest. The price paid per vehicle should be tested against a fall in steel scrap rates.
The facility must scrap more than half its rated vehicles to cover fixed costs. Banks ask where that intake will come from, by name.
The debt service coverage ratio (cash earned per rupee of loan instalment) dips when full repayment starts. Lenders want a margin above 1 in every year, and many look for 1.2 or more.
Values are the assumptions in our illustrative sample. Your report uses figures for your vehicle mix, location and buyers.
How much does a vehicle scrapping plant cost in India?
Cost depends on how many vehicles a day you plan to handle and which types you accept. Taking trucks and buses, and mechanising more of the handling, both raise it. The middle tier is the facility in our sample report; the other two are indicative ranges.
Small yard
₹3–6 crore
Up to about 10 vehicles per day, mostly cars and two-wheelers
- Depollution and dismantling equipment₹1–2 crore
- Land and sealed floor₹1.5–3 crore
- Working capital margin₹30–60 lakh
MSME term loan, often with CGTMSE cover
Mid-size facility
₹918 lakh
22 vehicles per day, 7,260 vehicles per year
- Plant and machinery₹444 lakh
- Land and building₹282 lakh
- Working capital margin₹90 lakh
Term loan ₹689 lakh (75%), promoter ₹230 lakh
Large mechanised facility
₹14–25 crore
About 50–70 vehicles per day, including commercial vehicles
- Machinery and handling₹6–12 crore
- Land and building₹5–9 crore
- Working capital margin₹1.5–3 crore
Term loan with collateral, or a tie-up with a vehicle producer or fleet
Small and large ranges are indicative and include land. NITI Aayog's January 2026 report costs a model facility for 20,000 vehicles a year at about ₹14 crore.
Vehicle scrapping plant economics
The sample report models a facility scrapping 22 vehicles a day over 330 working days, starting at 60% of capacity and reaching 80% in Year 5. Average realisation from steel, non-ferrous metal, parts and certificates is taken at ₹51,900 per vehicle.
| Land and site development | 123.66 |
|---|---|
| Building and civil works | 158.36 |
| Plant and machinery | 444.33 |
| Other fixed assets | 51.28 |
| Contingencies | 30.13 |
| Preliminary and pre-operative | 20.19 |
| Working capital margin | 90.26 |
| Total | 918.21 |
| Promoter's contribution (25%) | 229.55 |
|---|---|
| Term loan from bank (75%) | 688.66 |
| Cash credit limit (separate) | 270.76 |
| Total project cost | 918.21 |
Term loan at 10.5% with a 6-month moratorium and 54 monthly instalments. All figures are illustrative.
Automated vehicle scrapping recycling process
Every vehicle follows the same order: paperwork first, then hazardous fluids and parts out, then dismantling and baling. The Central Pollution Control Board's ELV guidelines set out this depollution-first sequence.
- Receipt and verification
The vehicle is weighed and its chassis and engine numbers are matched with the VAHAN record before a certificate of deposit is issued to the owner.
- Depollution
On a sealed concrete floor, fuel is siphoned, oils, coolant and brake fluid are drained, the AC gas is recovered and the battery and airbags are removed.
- Parts recovery
Tyres, wheels, glass, the catalytic converter and saleable parts such as alternators and starters are taken off and logged.
- Dismantling
Engine, gearbox, wiring harness, radiator and plastic trims come out so copper, aluminium and plastics stay apart from steel.
- Baling or shearing
The stripped shell is pressed into dense bales or cut to furnace size, which cuts freight cost per tonne to the mill.
- Dispatch and certificate
Sorted scrap goes to mills and authorised recyclers, and a certificate of vehicle scrapping is issued so the registration can be cancelled.
Machinery for a vehicle scrapping facility
The hydraulic baling press is the largest machinery item in our sample, followed by the depollution rig. Material handling with a grab and forklift keeps manual lifting down, which state RVSF policies also ask for.
| Machine | What it does | Sample cost (₹ lakh) |
|---|---|---|
| Depollution rig with fluid extraction | Drains fuel, oils and fluids into sealed tanks | 79.98 |
| Refrigerant recovery unit | Recovers AC gas into cylinders | 17.77 |
| Vehicle lifts and dismantling stations | Raise vehicles for draining and parts removal | 62.21 |
| Hydraulic baling press | Compacts body shells into bales | 97.75 |
| Hydraulic shear and engine cutter | Cuts heavy sections and engines | 53.32 |
| Material handler with grab and forklift | Moves vehicles, shells and bales | 62.21 |
| Weighbridge and radiation detector | Weighs vehicles and screens for radioactive parts | 26.66 |
| Oil water separator and effluent unit | Treats floor wash and rainwater | 26.66 |
| Fire fighting and air extraction | Protects fuel and tyre storage areas | 17.77 |
| Total plant and machinery | 444.33 | |
Costs are the sample report's estimates for a 22 vehicles per day facility. Get current quotations before you finalise.
Where a scrapping facility gets vehicles, and who buys the output
Supply is the hard part of this business. NITI Aayog's January 2026 report counted 117 operational RVSFs out of 178 approved as of September 2025, and expects the stock of end-of-life vehicles to approach 50 million by 2030. Yet informal yards often pay owners more, because they skip compliance and tax costs.
Output is easier to sell. A car's body is mostly steel, which goes to induction furnaces and mills as bales. Producers must also meet scrapping targets from 2025-26 under the End-of-Life Vehicles Rules, 2025, and buy EPR certificates from registered facilities to do so.
- Steel mills and induction furnace units buying baled scrap
- Aluminium and copper smelters and foundries
- Spare parts dealers and repair workshops
- Vehicle producers buying EPR certificates
- Authorised recyclers of tyres, batteries and used oil
Where a new facility wins: tie-ups that bring vehicles in, such as state transport fleets, government departments retiring old vehicles, insurers' total-loss cars and dealers taking old cars in exchange.
RVSF licence and approvals for vehicle scrapping
Approvals come from three sides: the transport department, the pollution control board and the tax system. Most states add their own RVSF policy on land and incentives.
| RVSF registration | Under the Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021, applied for on the National Single Window System. Odisha's policy restates a ₹1 lakh processing fee, a ₹10 lakh bank guarantee per facility and 10-year validity |
|---|---|
| Pollution board consent | Consent to establish before construction and consent to operate before scrapping starts, from the State Pollution Control Board |
| End-of-Life Vehicles Rules, 2025 | Registration on the CPCB EPR portal, in force from 1 April 2025; certificates are issued to the facility for each vehicle scrapped |
| Hazardous waste authorisation | Under the Hazardous and Other Wastes Rules, 2016, for used oil, batteries, fluids and other wastes sent to authorised recyclers |
| Land | In an industrial zone, owned or leased for at least 10 years in Odisha's policy, with 1 acre for two- and three-wheelers and 2 acres for cars and heavier vehicles |
| GST on scrap sales | Registered buyers of metal scrap (Chapters 72 to 81) deduct TDS under GST from 10 October 2024, which affects cash flow |
Loans and incentives for a vehicle scrapping unit
Projects of this size are above PMEGP limits, so most promoters use a bank term loan backed by a state incentive package.
MSME term loan with CGTMSE
Guarantee cover up to ₹10 croreCollateral-free guarantee for eligible micro and small enterprises. Suits small and mid-size facilities.
State RVSF policy incentives
Varies by stateOdisha, for example, offers a 10% capital subsidy on plant and machinery, capped at ₹1 crore. It adds 25% SGST reimbursement for 7 years and 5 years of electricity duty exemption.
Term loan with collateral
Large facilitiesFor projects above guarantee limits, often with a supply tie-up from a fleet or vehicle producer to support the intake plan.
Scheme terms change. Confirm current terms with the bank and your state transport or industries department before applying.
Mistakes that weaken an automated vehicle scrapping recycling project report
- Assuming full intake from day one
Many registered facilities run far below capacity. A report needs a named intake plan and a case that tests low utilisation.
- Using one scrap price for every vehicle
A two-wheeler, a car and a truck yield very different steel weights and parts. Revenue should follow the planned vehicle mix.
- Leaving out depollution and disposal costs
Brake fluid, AC gas, airbags and non-recyclable residue have handling and disposal costs that cut margin.
- Ignoring GST TDS and mill credit in working capital
Steel buyers pay on credit and deduct tax at source, so the cash credit limit must cover both.
- Counting EPR certificate income as fixed
Certificate prices depend on producer demand. Show them as upside, not as the income that repays the loan.
How NPCS helps you set up a vehicle scrapping facility
- Capacity and vehicle mixSize the yard for the two-wheelers, cars and commercial vehicles you can actually source.
- Machinery and layoutDepollution, dismantling and baling equipment, with a layout that keeps sealed and storage areas apart.
- Bank-ready project reportProjections, DSCR, intake sensitivity and working capital in the format your lender wants.
- Approvals checklistRVSF registration, pollution consents, ELV Rules registration and your state's policy terms.
NPCS has prepared project reports since 1994. Its client list includes 3 assignments on automated vehicle scrapping, among 48 in recycling and waste processing.
What's inside the automated vehicle scrapping recycling sample report
- Introduction
- Uses and applications
- Market potential
- Manufacturing process
- Raw materials
- Plant and machinery
- Land, building and utilities
- Manpower
- Licences and approvals
- Project cost and means of finance
- Working capital
- Projected profitability
- Cash flow statement
- Projected balance sheet
- Depreciation
- Term loan repayment
- Debt service coverage
- Break-even analysis
- Financial ratios
- Key assumptions
- Conclusion
- Monthly loan repayment schedule
18 pages, five-year projections, illustrative figures.
Open sample reportFree sample or a report for your project?
| What you get | Free sample | NPCS report for your project |
|---|---|---|
| Capacity and location | Typical unit | Your capacity, site and state |
| Figures | Illustrative | Built on current prices and quotations |
| Machinery suppliers and quotations | No | Yes |
| Market survey for your region | No | Yes |
| Bank or scheme format (PMEGP, term loan) | No | Yes |
| Use for a loan application | No | Yes |
Real NPCS automated vehicle scrapping recycling project reports
These are automated vehicle scrapping recycling project reports NPCS has prepared, with the plant capacity, total capital investment, rate of return and break-even worked out in each. Costs have moved since some were written, so we bring any of them up to date for your capacity and location.
| Project report | Plant capacity | Total investment | Rate of return | Break-even | Action |
|---|---|---|---|---|---|
| Automated Vehicle Scrapping and Recycling | 1000 Vehicles per Month | ₹2.09 crore | 29% | 40% | Get this report |
| Setting up Automated Vehicle Scrapping and Recycling | Spare Parts:188 Units/Day Waste Oil:225 Units/Day Waste Tyre:1,125 Units/Day Engines:25 Units/Day Steel Scrap, :30,000 Units/Day Rubber Scra… | ₹25 crore | 30% | 40% | Get this report |
| Automated Vehicle Scrapping and Recycling | Spare Parts: 375 Units Per Day , Waste Oil: 450 Units Per Day , Waste Tyre: 2250 Units Per Day , Engines: 50 Units Per Day , Steel Scrap, : … | ₹51 crore | 32% | 36% | Get this report |
| Automated Vehicle Scrapping Unit with Recycling of Steel and Aluminium | Spare Parts: 200 Units Per Day, Waste Oil: 275 Units Per Day, Waste Tyre: 500 Units Per Day, Engines: 30 Units Per Day, Rubber Scrap: 100 Un… | ₹81 crore | 30% | 35% | Get this report |
Figures as worked out in each NPCS report. Total investment includes plant and machinery, land and building, and working capital.
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Automated Vehicle Scrapping Recycling project report: frequently asked questions
How much does it cost to set up a vehicle scrapping centre in India?
A small yard handling up to about 10 vehicles a day needs roughly ₹3–6 crore, and a large mechanised facility ₹14–25 crore, including land. These are indicative ranges. Our sample report models a 22 vehicles per day facility at ₹918 lakh. Your own cost depends on land, the vehicle types you accept and how much handling is mechanised.
What licence is needed to start a vehicle scrapping business?
You need registration as a Registered Vehicle Scrapping Facility, applied for through the National Single Window System, plus consent to establish and operate from the State Pollution Control Board. You also register on the CPCB EPR portal under the End-of-Life Vehicles Rules, 2025, and hold hazardous waste authorisation for oils, batteries and fluids.
How much land is needed for an RVSF?
It depends on the state and the vehicles you scrap. Odisha's RVSF policy of November 2022, for example, asks for at least 1 acre for two- and three-wheelers. Cars and heavier vehicles need 2 acres, in an industrial zone with a 7 metre access road. Check your own state's RVSF policy before buying land.
Is vehicle scrapping business profitable?
It can be, if the facility gets enough vehicles. Our illustrative sample reaches a 15% return on investment in Year 3, with break-even at 52% of capacity and payback in about 4.5 years. NITI Aayog's January 2026 report found many registered facilities running below 20% utilisation, so assured vehicle supply matters more than machinery.
How does a vehicle scrapping facility earn money?
It earns mainly from selling baled steel scrap to mills and furnaces. Aluminium, copper, catalytic converters and good spare parts add to income. Under the End-of-Life Vehicles Rules, 2025, a registered facility also earns EPR certificates for each vehicle scrapped, which vehicle producers buy to meet their targets.
What is a certificate of deposit in vehicle scrapping?
It is the document the scrapping facility issues when an owner hands over a vehicle. It proves the transfer of the vehicle and can be traded. In Odisha, for example, a new vehicle registered against it gets a 25% motor vehicle tax concession if non-transport and 15% if transport, and no registration fee.
Is the sample report free and can I use it for a loan?
The sample is free to view and download. It is an illustrative report that shows the format and depth of an NPCS report; its figures are representative and not based on a real project. It should not be submitted to a bank. For a loan, NPCS prepares a report for your own capacity, location and vehicle mix.
Sources and references
- Enhancing Circular Economy of End-of-Life Vehicles (ELVs) in IndiaNITI Aayog, checked Oct 2026
- Policy for setting up Registered Vehicle Scrapping Facility (RVSF) in Odisha, Notification No. 10677Commerce and Transport Department, Government of Odisha, checked Oct 2026
- Registered Vehicle Scrapping Facility (RVSF) applicationeTransport Division, NIC, for the Ministry of Road Transport and Highways, checked Oct 2026
- Guidelines for environmentally sound facilities for handling, processing and recycling of end-of-life vehiclesCentral Pollution Control Board, checked Oct 2026
- Lok Sabha Unstarred Question No. 3 on end-of-life vehicles, 3 February 2025Lok Sabha, checked Oct 2026
- Lok Sabha Unstarred Question No. 4608 on vehicles scrapped at RVSFs, 21 August 2025Lok Sabha, checked Oct 2026
- Circular on registration under the Environment Protection (End-of-Life Vehicles) Rules, 2025Puducherry Pollution Control Committee, checked Oct 2026
- Notification No. 25/2024-Central Tax (TDS on metal scrap)GST Council, Ministry of Finance, checked Oct 2026
- Credit Guarantee Fund Trust for Micro and Small EnterprisesCGTMSE, checked Oct 2026
The NPCS project team, led by Ajay Kumar Gupta
This page and its sample report are prepared and reviewed by the NPCS project team, which has written techno-economic feasibility studies and detailed project reports since 1994.
Ajay Kumar Gupta founded Niir Project Consultancy Services (NPCS) and leads the organisation. With 40 years of experience in MSME project consulting, he has built the team that has delivered more than 28,000 project reports for clients worldwide, helping entrepreneurs plan and finance profitable manufacturing businesses.
- Published
- Last updated
- Next review
- Oct 2027
- Reviewed by
- NPCS project team
This page is reviewed every 12 months, or sooner when scheme limits, GST rates, BIS rules or pollution categories change. The sample report is illustrative: its figures are generated from industry-typical ratios for a unit of this size, checked so every statement balances, and are not taken from any client project.