Honda has chosen India as the global production base for the Alpha. On the surface, this looks like a "cost decision," but in essence it amounts to "avoiding the one place it should most be." Japan's domestic manufacturing costs are high and its market size is limited, while China boasts the world's most complete and fastest-iterating EV supply chain and intelligent ecosystem—yet Honda has precisely lost in China. To continue concentrating the global pure electric center of gravity in China would amount to launching a global car from a "lost battlefield." Choosing India is a compromise between cost and geopolitics that does not provoke any side.

India appears to have low labor costs, but supply chain efficiency is low and costs are actually higher than manufacturing in China

However, what India can offer is precisely not what Honda lacks most. India's labor and land costs are indeed lower than China's, and the PLI scheme provides 8%–18% sales-linked incentives for electric vehicles and components. But India's domestic lithium-ion battery capacity can meet only about 20% of demand, 92% of rare earths are imported from China, the localization rate of motors and controllers is only 30%–40%, and overall manufacturing costs are still about 10% higher than in China.

More critically, intelligent capabilities are not part of India's manufacturing system. India is strong in IT outsourcing, not in automotive-grade software, domain controllers, and the engineering deployment of urban NOA. Producing the Alpha in India will not automatically provide it with a smart cockpit and intelligent driving system capable of competing with China's new forces.

The reason Honda's EVs do not sell in China or globally is high prices and low intelligence

Honda's real situation in the global EV market is already clear from the numbers: global pure electric sales in 2025 were about 15,000 units, only half of 2024 and less than 2% of total sales; at the operating level, huge losses were recorded due to adjustments to its electrification strategy, the target of 20% pure electric share by 2030 has been canceled, and the company has shifted fully toward hybrids.

In China, the problem is even sharper: sales in China in fiscal 2025 were 645,000 units, with pure electric sales for the full year below 20,000; the GAC Honda P7 and Dongfeng Honda S7 have long had monthly sales in the hundreds, and the Lingxi L delivered only 178 units in its first month on the market.

User evaluations of Honda EVs are highly consistent: the chassis and handling remain up to Honda standards, but the infotainment system is described as a "senior phone," intelligent driving lacks urban NOA, the operating logic is "like a fuel car," and yet the price once targeted the mid-to-high end of the new forces.

The P7 and S7 were subsequently heavily discounted, anchoring the brand at the 150,000 yuan level, and the flagship GT model was forced to be postponed until after 2026. The fundamental problem is that in China's market, where "software defines experience," Honda still tries to price its intelligence shortcomings based on mechanical quality, and consumers refuse to pay a premium for an outdated screen and a driving assistance system that is not smart enough.

How much lower can costs be if Honda EVs are made in India?

When Apple went to India, it migrated assembly operations; core chips and camera modules still rely on imports, and India captures less than $25 per unit in added value in the iPhone value chain. If Honda's Alpha copies this path—India handles welding, painting, and final assembly, while smart cockpit and intelligent driving solutions are still purchased externally or defined by Japanese/Chinese teams—then the Indian factory solves only the "vehicle rollout cost," not "product competitiveness."

A Honda pure electric SUV assembled in India but one generation behind China's mainstream market in intelligence may have policy protection in India itself and may barely gain a foothold in Southeast Asia and Europe on brand residual value, but it has no possibility of returning to China, the world's most competitive market, to turn things around.

Can Honda still turn things around in the global EV market?

The future domestic pure electric lineup of Honda in China will most likely shrink rather than expand. New energy models planned by GAC Honda around 2027 are more likely to be mainly hybrids and pure electric facelifts through deep local cooperation. If the Dongfeng Honda Lingxi brand continues to exist, it must also completely adopt a new intelligent solution led by a Chinese team; otherwise it will be difficult to escape the cycle of three-digit monthly sales.

Honda's real global pure electric opportunity does not lie before 2027, but in whether it is willing in some regional market (most likely neither China nor India) to truly let go of the obsession with "developing everything in-house" and use external intelligent capabilities to make up for its shortcomings. Manufacturing in India can let Honda lose a little less money, but it will not make any Honda EV "sell well."