Sony and Honda suspend joint electric vehicle project

Sony and HMC> Honda Motor is slowing down a joint venture aimed at manufacturing premium electric vehicles.

Sony Honda Mobility—an enterprise jointly established by the two Japanese companies—has decided to halt development and launch of its first model, Afeela, as well as the second model currently in development.

The plan was launched at the peak of the 2022 electric vehicle boom, when Sony’s CEO had high hopes for the partnership, expecting the automotive market to increasingly shift toward a service model, with customers regularly paying for software downloads and entertainment.

SHM said Wednesday that since its inception, its goal has been to create high-value mobility products that combine Sony’s and Honda’s technology and expertise.

However, due to Honda’s reevaluation of its electrification strategy, SHM will no longer be able to use certain technologies and assets originally planned to be provided by the automaker, and there is no longer a feasible way to bring these vehicles to market.

Earlier this month, Honda Motor announced that due to a reevaluation of its electric vehicle strategy, with related expenses and losses reaching up to $15.7 billion, it expects to report a loss for the first time in decades. The automaker stated that, given the slowdown in the North American electric vehicle market, it has decided to cancel the launch and development plans for some models.

Honda said Wednesday that the suspension of production at the joint venture is not expected to have a material impact on its fiscal year forecasts through March.

Meanwhile, Sony said it is evaluating the impact of the suspension on its operations and financials for the fiscal years ending March 2026 and March 2027. But since SHM has been operating with a light-asset model, Sony believes the impact will not be significant.