Ashok Leyland and its electric vehicle subsidiary, Switch Mobility, have become the first manufacturers to partner with the Ministry of Road Transport and Highways (MoRTH) for the New Delhi-NCR vehicle replacement scheme. This ₹9,585 crore initiative aims to modernize the National Capital Region’s commercial fleet by replacing over 2 lakh aging trucks and buses with cleaner alternatives. The partnership marks a significant step in the government’s efforts to combat air pollution through systematic fleet renewal and financial incentives.
The New Delhi-NCR Vehicle Replacement Scheme
The New Delhi-NCR vehicle replacement scheme is a specialized intervention designed to accelerate the phase-out of older, high-polluting commercial vehicles in the capital region. With a total outlay of ₹9,585 crore, the scheme targets the replacement of approximately 2.07 lakh vehicles, comprising 1.91 lakh trucks and over 16,000 buses. The central government is contributing ₹5,041 crore toward the initiative, with additional support coming from state tax concessions.
The scheme specifically focuses on vehicles complying with Bharat Stage-IV (BS-IV) or older emission standards. Owners of BS-III or older vehicles are mandated to scrap their units at Registered Vehicle Scrapping Facilities (RVSF) to unlock the benefits. For BS-IV vehicles, owners have the option to either scrap the vehicle or sell it in regions outside the National Capital Region that are not part of the National Clean Air Programme (NCAP). The scheme is open for enrollment for two years, while the associated central incentives will continue for a period of five years.
First OEM Partnership: Ashok Leyland and Switch Mobility
On June 15, 2026, Ashok Leyland and Switch Mobility signed a Memorandum of Understanding (MoU) with the Ministry of Road Transport and Highways. This agreement establishes them as the first Original Equipment Manufacturers (OEMs) to participate in the NCR fleet modernization program. Under this partnership, the companies will offer an 8% discount on the ex-showroom price of eligible new trucks and buses.
For electric vehicles (EVs), the discount provided by Switch Mobility, the dedicated electric arm of Ashok Leyland, is capped at the level of a comparable Internal Combustion Engine vehicle in the same weight category. Ashok Leyland, headquartered in Chennai and established in 1948, is one of India’s largest commercial vehicle manufacturers. By being the first movers in this scheme, these companies are positioning themselves to lead the transition toward greener logistics and public transport in the National Capital Region.
Incentive Structure and Financial Support
The scheme provides a multi-layered financial support system to make the transition affordable for fleet operators. Beyond the manufacturer discounts, the central and state governments have collaborated to offer subsidies on loans, fuel, and taxes. This structured support is aimed at reducing the total cost of ownership for cleaner BS-VI or electric commercial vehicles.
| Incentive Type | Benefit Details | Duration |
|---|---|---|
| Manufacturer Discount | 8% discount on ex-showroom price | At the time of purchase |
| Interest Subvention | 5% interest subsidy on vehicle loans | 5 years |
| Fuel Vouchers | Monthly vouchers worth up to ₹4,800 | 5 years |
| Road Tax Concession | Up to 100% concession on motor vehicle tax | 10 years |
| Registration Fees | Full waiver of registration fees | One-time |
The road tax concessions are being implemented by participating state governments within the NCR, including Delhi, Haryana, Rajasthan, and Uttar Pradesh. To ensure transparency and efficiency, the scheme will be managed through an integrated digital portal that allows for real-time verification of eligibility and automated disbursement of incentives.
Environmental Significance and Fleet Modernization
The National Capital Region has long struggled with severe air quality issues, with heavy commercial vehicles like trucks and buses being major contributors. Statistics indicate that these vehicles account for nearly 36% of PM2.5 emissions from the transport sector in the region. By replacing BS-IV and older units with BS-VI compliant or electric alternatives, the government expects a substantial reduction in Carbon Monoxide, Nitrogen Oxide, and particulate matter.
This regional scheme aligns with the broader Voluntary Vehicle-Fleet Modernization Programme (V-VMP), commonly known as the Vehicle Scrappage Policy, which was launched by the Prime Minister in 2021. While the national policy provides a general framework for scrapping old vehicles, this NCR-specific initiative offers much higher financial support to address the unique pollution challenges of northern India. The transition to cleaner technologies is also expected to boost the domestic manufacturing sector under the Make in India initiative, particularly in the emerging electric vehicle ecosystem.
The partnership with Ashok Leyland and Switch Mobility is seen as a pilot phase, with more automotive manufacturers expected to join the program in the coming months. This collaborative approach between the government and private sector is crucial for achieving the goal of modernizing over two lakh vehicles within the specified two-year enrollment window.
Key Takeaways
- The New Delhi-NCR vehicle replacement scheme has a total outlay of ₹9,585 crore and aims to replace 2.07 lakh old commercial vehicles.
- Ashok Leyland and its subsidiary Switch Mobility are the first Original Equipment Manufacturers to offer an 8% discount under the initiative.
- The scheme provides a 5% interest subvention on vehicle loans and monthly fuel vouchers worth up to ₹4,800 for five years.
- Participating state governments are offering up to 100% motor vehicle tax concessions for 10 years for newly registered vehicles.
- The initiative targets vehicles that are BS-IV or older, with a mandate to scrap all BS-III or older commercial units.
- Commercial trucks and buses contribute approximately 36% of PM2.5 emissions in the National Capital Region’s transport sector.
- Ashok Leyland, a key partner in the scheme, was established in 1948 and is headquartered in Chennai.
