Honda Scraps ₹600 Crore Dedicated EV Factory Plan in Karnataka

Bengaluru, October 27: Honda Motorcycle & Scooter India (HMSI) has reportedly dropped its plan to invest ₹600 crore in a dedicated electric two-wheeler factory at its Narsapura facility in Karnataka. The company is reassessing its electric-vehicle strategy amid weak sales and intensifying competition, according to a report published by The Financial Express on October 26.

The proposed facility, referred to as Factory E, had been planned to begin operations in 2028 with an initial annual capacity of 600,000 units. Honda had previously outlined an ambition to produce one million electric two-wheelers annually in India by 2030.

Production to Rely on Existing Facilities

According to sources cited in the report, Honda now plans to meet electric two-wheeler demand through its existing manufacturing facilities rather than building the dedicated plant.

However, the report noted that existing plants may not have enough capacity to support a substantial increase in EV demand at the scale Honda had previously targeted. The company had not provided an official response to the report by publication time.

EV Sales Remain a Challenge

Honda launched the Activa e: and QC1 electric two-wheelers in India in 2025, but its electric two-wheeler sales remained far below those of several established competitors in FY26, according to the report.

TVS Motor, Bajaj Auto, Ather Energy and Hero MotoCorp have all been expanding their electric two-wheeler businesses. This competitive environment raises pressure on Honda to offer compelling products, pricing, battery performance and after-sales support.

What Happens to Honda’s 2030 Target?

The reported decision puts the company’s earlier goal of producing one million EVs annually in India by 2030 under pressure. Honda may need to revise its manufacturing plans, use existing capacity more intensively or reconsider the timeline if demand strengthens.

Market Perspective

The move highlights the challenge of scaling EV manufacturing before product demand and market share are firmly established. A dedicated factory can improve production efficiency at high volumes, but it also creates a large fixed investment commitment.

For consumers, the key issue is not the factory announcement alone but Honda’s future product launches, service support, battery warranty and ability to supply vehicles at competitive prices. The company’s long-term EV plans remain subject to further clarification.