HMSI Adopts Wait-and-Watch Approach on EVs, Eyes 2025 to Gauge Market Growth, Customer Sentiment & Evolving Incentive Landscape in India
As India’s electric two-wheeler market continues to expand, Honda Motorcycle & Scooter India (HMSI) is treading cautiously, choosing a “wait-and-watch” strategy before fully scaling its EV operations. The company believes 2025 will be a decisive year in determining the long-term trajectory of the sector.
Despite entering the electric mobility race relatively late, HMSI has introduced its first two electric scooters this year—the Activa e with a swappable battery and the QCI with a fixed battery. However, the company is proceeding deliberately, with plans to set up a dedicated EV manufacturing plant in Karnataka by 2028.
“Startups have been pioneers in India’s EV space, but traditional players like TVS and Bajaj are now driving significant volumes,” said Tsutsumu Otani, Managing Director, President & CEO of HMSI, during a recent media interaction.
Otani noted that while EV sales have surged for some OEMs, the overall market growth remains modest. Much of the current demand, he said, is incentive-driven, and customers may begin to shy away if cost advantages or subsidies are withdrawn.
According to industry figures, EV penetration in India’s domestic two-wheeler market reached 6% in FY 2024-25, with 11.49 lakh units sold, up from 9.48 lakh units the previous year. Ola Electric remains the segment leader, followed by TVS and Bajaj, with Ather Energy and Hero MotoCorp trailing behind.
Battery Replacement: A Deciding Factor
Otani drew attention to the challenge of battery degradation—a reality EV customers may begin facing soon. Unlike internal combustion engine (ICE) vehicles that typically last 10-15 years, EV batteries begin degrading after 5 years, forcing users to either replace the battery or the vehicle.
“The EV market is entering a phase where early adopters will start to experience battery wear and tear. This will shape future customer perceptions of EV ownership,” Otani stated.
If customers are willing to accept the cost of battery replacement, the market may continue to expand. But the long-term picture remains uncertain, he added.
Slow but Strategic Rollout
Currently, the Activa e is only available in Bengaluru, with a phased rollout planned for Delhi and Mumbai, depending on the availability of battery swapping stations. Both models are being sold through HMSI’s existing Red Wing dealerships.
Addressing the absence of home charging for the Activa e, Otani explained that under the battery swapping model, the battery remains the property of HMSI, insulating customers from long-term degradation costs and ensuring performance safety. Home-charging setups, by contrast, place ownership—and associated risks—on the user.
HMSI is also working with OMC Power to expand India’s battery swapping infrastructure, taking cues from its experience in Japan and Indonesia, where similar models are already in use.
Eye on Leadership in ICE and EV Markets
While HMSI takes a cautious approach in the EV space, it remains aggressive in its ambitions for the ICE market. The company aims to overtake Hero MotoCorp to become the No. 1 two-wheeler brand in India this fiscal year.
As part of this vision, HMSI has announced a ₹2,020 crore investment to build a fourth production line at its Vithalapur facility in Gujarat, scheduled to be operational by 2027. This expansion will add 6.5 lakh units of annual capacity, primarily focusing on 125cc motorcycles.
The increased capacity is also aligned with HMSI’s export strategy, as it looks to make India a hub for global mid-range motorcycles, including those destined for European markets.
HMSI currently operates four manufacturing plants in India—located in Manesar (Haryana), Tapukara (Rajasthan), Narasipura (Karnataka), and Vithalapur (Gujarat). The upcoming EV plant in Karnataka will further cement its commitment to India’s evolving mobility landscape.
