Honda has been on the roll with electric scooters for the last three months. The company first launched the CUV e: commuter electric scooter in Europe and Indonesia. Then, it introduced the Activa e: and QC1 electric scooters in the Indian market.
The CUV e: and Activa e: are based on the same platform, carry the same hardware, and are differentiated by styling and features.
The Importance of India
In India, Honda enters a very competitive market. It already has a nearly 50% share of the nearly six million scooter segment but has zero presence in the 1.1 million electric scooter market.

Honda's absence has allowed other incumbents like Bajaj Chetak, TVS Motor, and startups like Ather Energy and Ola Electric to control the market. With the Activa e: and the QC1, Honda now enters the arena as a challenger brand.

India is one of the most important markets for Honda. Nearly 12.5% of the brand's global sales come from the market where Honda has been successfully flogging the decades-old Activa platform. Profit margins are big, and when multiplied by large volumes, this should be the most profitable market for the company.

Unfortunately, much to Honda's discomfort, the Indian scooter market has been turning electric to an extent. While it has not impacted Honda much, the company also has its public internal mandate to sell four million electric two-wheelers annually by 2030. That won't happen without Honda selling a million electric scooters/motorcycles in India.

The Challenger Brand Logic
Logically, a challenger brand, especially one that dominates the global two-wheeler market with an overwhelming 35% share, should enter the market with a superlative product and set a new benchmark. That's what everyone expected with Honda.
Then, the spec sheet and the 'For India' products were revealed, and the disappointments started. The Activa e: may be based on the CUV e:, both based on the SC e: concept from Tokyo 2023, but unlike the CUV e:, which has some semblance of sportiness, the Activa e: seems to be designed for a more mature audience. The QC1 looks even more unexciting, which is intentional as it targets utility-seekers.
If the product plays safe with its design, one expects the other parts of the equation to compensate. So everyone hoped. Maybe Honda would be the most cost-effective. Maybe Honda would roll out the network at super fast speed. Maybe there would be a guaranteed buy-back scheme. Maybe they would offer the battery as a subscription, very likely considering that Honda is setting up a swapping network.
Too many expectations. Too many maybes.
Almost none materialized, making us wonder if we have rightly comprehended the Honda strategy for India. We did a two-part comprehensive analysis of Honda's global E2W plans many weeks back:


Activa e: Specs are Mediocre
In our analysis, we expected that Honda would at least excel in one area, where the brand would position itself as heads and shoulders above everyone else. Paper specs were unlikely to be the area of excellence. When writing the previous analysis, the specs were already in the public domain, and there was no way Honda would come out better than Ather or Ola. The Activa e: has mediocre specs. There is not a single thing in there that can be called class-leading. Is that intentional? Does Honda believe it does the basics so well that the frills don’t matter?
Or maybe it comes from experience?
Honda has gone with a 6 kW motor in the Activa e:. It nearly matches the Ather 450X on paper but is completely outclassed by the Ola S1 Pro.
But those are paper specs. Honda knows emerging market commuter scooters better than the commuters themselves. A steady 75 kph over long distances is better than a speedometer error-aided spurt to 120 kph for 15 seconds before thermal management kicks you down.
Why does that happen? Bad thermal management, poorly designed batteries, and drawing too much current to go into Rossi mode may be some of the 100-odd reasons, and we may be over-simplifying things here. Most importantly, thermal management and intervention are important to avoid a 'kaboom' event.
Who is Responsible for the Battery Life?
To be fair to Honda, one must consider who is responsible for battery life and maintenance during business planning. For both Ola and Ather, and Bajaj and TVS, and everyone else in the market, that responsibility lies with the customer. So, if the customer is forever riding like a maniac, then any damage to the Li-ion pack is theirs. Any fall in range (as long as it says above 75-80% as stipulated in the battery warranty) does not impact the manufacturer; it affects the customer.
Meanwhile, Honda sells you the batteries, but they can only be swapped (in the Activa e:), which means your battery ownership is notional. It's a right of usage, not a family heirloom; any damage to the battery is on Honda. The user is swapping out his batteries literally every day. he doesn't even know where the original pair that he paid for is.
Honda does not provide a home charging dock in the Indian market for now, even though we could find one on offer in the aftermarket.
If the batteries are captive in the Honda ecosystem, their residual value also accrues to the company. That's a positive in the bigger picture (environment) - Honda can plan the second life and the eventual recycling of the batteries, which is difficult for any other manufacturer. Currently, India has no battery recycling regulations that make it mandatory for manufacturers to be responsible for recycling. Europe introduced the Battery Passport regulations, and the amendment was adopted by the EU Council in July 2023.

For now, India does not have anything similar, but that's just a matter of time. Honda has an advantage when things change, as it controls the ecosystem.
Battery Sizes and Honda's Limitations
Honda's limitations and strengths are the same - the MPP. Its strengths are that the customer gets access to a battery-swapping network that, over time, would be widespread enough to support every customer (more about that later).
However, once you design a scooter around the MPP, you have decided that it would carry 2.95kWh. Each battery is 1.475 kWh - one is too little, and three are too much. With the battery capacity fixed, the motor automatically gets limited. Swappable batteries are limited by cell choice - to keep costs under control, one would like to stick to within 2C-3C levels. No one wants to splurge on high-discharge cells if the same battery has to power everything from mopeds to commuter motorcycles.
Honda can't give too much power, or it damages the batteries in the long term. The company would not want a slow battery degradation that spoils user experience.
So, 6kW it will be and a top speed limited to 80 kph.
Honda also put constraints on itself by developing a global scooter platform. If MPPs are the way to go in Europe and Indonesia, India automatically gets the same. In this case, going by the Honda philosophy of global commonization, they also ended up with the same motor everywhere.
India is huge.
In Bengaluru, the only city where Honda has launched the Activa e: the company has 75 swapping points. This is hilariously inadequate for a city the size of Bengaluru (population 12m+) - this MPP rollout is nothing more than an overgrown pilot. In perspective, Gogoro has 2500+ battery swap stations in Taipei City (population, one-fifth of Bengaluru).
The other two cities - Delhi and Mumbai - where Honda had initiated pilots and was expected to start Activa e: sales have not reached readiness. There is no way that Honda will get around to rolling out a comprehensive swapping network in even the top 100 towns of India - the CAPEX would be huge. Rapid expansion is unlikely.
So, Honda has decided to charge the customer for the batteries while still taking responsibility for the maintenance. It's not as bad as it looks - the customer pays once for the battery but gets a lifelong supply of batteries as long as they pay the monthly subscription charges.
But those charges are huge.
Honda offers two plans: INR 1999/month (USD 23) for 40km usage per day and INR 3599/month (USD 42) for up to 100 km usage per day. In our study of Indian commuter scooter customer behavior, 40km is the likely average distance a user travels daily. So, the user will pay INR 1.66/km for the battery swaps.
In comparison, an electric scooter without a swappable battery charging home pays about INR 8 per kWh. Each kWh gets you about 30 km in the world. This means that the per km cost is INR 0.267.
Obviously, this is not a fair comparison as Honda is taking the onus of battery maintenance and life on itself. But even when compared to the other battery-swapping networks, this is high. The typical charges for Sun Mobility or Yuma Energy are around INR 35-40 per kWh. At 30km to a kWh, this translates to INR 1.18-1.33/km.
Is an INR 0.40/km, or 25%, a premium Honda is charging for its brand? But then, swappable batteries on a per km monthly subscription are potatoes. It is challenging if you intend to charge a 25% premium for potatoes with the 'Wings' sticker on them.
Scooter pricing is way off
Even before the swapping charges, the scooters themselves are priced relatively high. Honda announced the Activa e: and QC1 prices for the Indian market. The Activa e: Standard model is priced at INR 117k (USD 1350), while the one with RoadSync Duo is priced at INR 151,600 (USD 1755). The lower price segment QC1 is priced at INR 90k (USD 1050). All these prices are ex-showroom.

Note that there is a significant (INR 35000/USD 405) price difference between the Activa e: and Activa e: with RoadSync Duo. This is not Honda just charging for the app but also the hardware differences.

Honda knows the customer.
Go around any small town or large city in India, and the Honda Activa is ubiquitous. Any scooter accounting for a 50% market share has to be. What is most obvious is that Activa does not have a solo customer profile. There are multiple—any scooter accounting for a 50% share of the market has to have.
So when we scoff at Activa's mediocre specs, we should look at the whole picture. Honda has to satisfy multiple customer profiles. The product has to be the most optimal Highest Common Factor (HCF) of scooters, appealing to as many as possible and polarising none.
We believe this is Honda's ideology, but that is not the absolute truth. Honda can be adventurous when it wants to. Cue the Zoomer.

So, being insipid in styling is a part of Honda's India strategy. This may stem from the fact that the Activa ICE is not a class-leading product but a very reliable one that does nearly everything remarkably well. It is the quintessential jack of all trades.
That may also be the aspiration for the Activa e: hence the styling and the specs. The disappointment is intentional.
Activa and QC1 are not the only plays
India is the most important market for Honda globally. If things have to turn electric strongly by 2030, Honda needs multiple models. One of them may be a commuter motorcycle. There also have to be more scooters. The company gave an inkling of that in a press briefing yesterday when it announced an EV-dedicated manufacturing plant for the Indian market.

The commuter motorcycle being speculated will have a 4kWh battery, which means no MPPs. It is likely that Honda is planning a fixed-battery motorcycle.
Honda's plan for India also includes sorting out the circularity - battery recycling for the MPPs. For that, it has tied up with OMC Power to deploy mid-life and end-of-life MPPs to provide power backup to parts of the country that do not get reliable power.

Don't Kill ICE Before it's Natural Death
Large corporations are not environmentalists. The cornerstone of Honda's E2W strategy is to be an all-electric manufacturer by 2040. That is 15 years from now. There should be no hurry to move Activa ICE customers to e:. Preserving margins is important as the Activa ICE has been hugely profitable for Honda and its dealers. Any move to replace that with a lower-margin product would be met with resistance from within the company and its dealers.
The price-conscious Indian market means that electric scooter manufacturers are not making any money today. Both Ola and Ather lose significant amounts of money per scooter. Bajaj says that their contribution margin is positive on the Chetak. Clearly, electric is far away from becoming profitable for anyone, despite government subsidies and tax exemptions. It may take several more quarters of cost optimization and battery prices coming down before the better players start making money.
That means Honda is not in a hurry. The seemingly high pricing is aimed at preserving profitability. The rollout is city by city, giving Honda ample time to fine-tune the strategy. Then, the monthly swapping charges bring subscription revenue enough to offset any immediate margin loss from scooter sales.
It's a well-thought-through strategy that pursues profits relentlessly and uses Honda's strong market position as leverage.
If customers find the Activa e: too expensive and the subscription charges prohibitive and stay away, it doesn't hurt as the Activa ICE continues relentlessly. With the strong uptrend in ICE scooter prices, we expect ICE scooter prices to rise above electric eventually. The customers would shift.
Why rush that?