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Honda Scraps ₹600 Crore EV Factory Plan in India
27 Oct
Summary
- Honda cancels a ₹600 crore electric two-wheeler factory in Karnataka.
- The decision risks Honda's goal of producing one million EVs annually by 2030.
- Weak sales and competition are cited as reasons for the strategy shift.
Honda Motorcycle & Scooter India (HMSI) has abandoned its plan to invest ₹600 crore in a dedicated electric two-wheeler factory in Karnataka. This significant decision casts doubt on HMSI's target of producing one million electric vehicles (EVs) annually in India by 2030.
Sources indicate that HMSI is recalibrating its EV strategy due to sluggish sales and heightened competition. The proposed factory, intended for the Narsapura plant and scheduled for completion in 2028, was designed for an initial annual capacity of 600,000 units, aiming for one million by 2030.
Instead of the new facility, Honda will now leverage its existing plants to fulfill EV demand. However, concerns persist about the capacity of these current facilities to scale up to one million units annually should demand surge.
This development occurs as India's electric two-wheeler market expands, with EV penetration reaching 6.5% in FY26. Despite a strong conventional vehicle presence, HMSI has struggled in the EV segment, selling only 4,312 units in FY26 compared to rivals.
The cancellation raises questions about Honda's ability to achieve its global objective of selling four million electric motorcycles annually by 2030. India was envisioned as a key manufacturing and export base for affordable electric two-wheelers in emerging markets.
