Sony Honda Mobility (SHM), a joint venture between Sony and Honda, has announced the cessation of development for its Afeela electric vehicle series. This decision follows a strategic reassessment of electric vehicle plans by Honda, which reportedly left the joint venture without a viable path to bring the Afeela models to market. The announcement impacts both the planned Afeela 1 sedan and an unnamed SUV concept.
Main Announcement and Rationale
The discontinuation of the Afeela project was confirmed by Sony Honda Mobility, citing Honda's recalibration of its electric vehicle (EV) strategy. SHM stated that this change meant it would be unable to utilize certain technologies and assets from Honda as originally planned for the Afeela models. Slower EV demand was also cited as a contributing factor.
Projected Financial Impact
Earlier this month, Honda had projected a writedown of up to 2.5 trillion yen, equivalent to approximately $15.7 billion, on its EV investments.
This financial adjustment marks Honda's first annual loss as a public entity in over 70 years.
Despite the project's cessation, both Honda and Sony have indicated that the halt in Afeela development is not expected to have a material impact on their respective financial forecasts for the current fiscal year.
Customer Refunds and Vehicle Details
Sony Honda Mobility has confirmed that full refunds will be issued to customers who had reserved Afeela models. These customers, including those in California who had made deposits of $200 for the Afeela 1, will be compensated.
Afeela 1 Specifications and Plans
The Afeela 1 was an electric sedan that had entered trial production at Honda’s East Liberty Auto Plant in Ohio. Deliveries were anticipated to begin in California late this year, with a projected starting price of $89,900. Orders for the vehicle had commenced last year. The Afeela 1 was designed to feature extensive infotainment capabilities, including multiple screens, 40 sensors, cameras for semi-autonomous driving, and planned PlayStation 5 game streaming. A second model, based on a newer prototype, was also planned for launch by 2028.
Background of the Joint Venture
The Sony-Honda Mobility joint venture was established with the objective of combining Honda's established vehicle engineering and manufacturing expertise with Sony's software and gaming capabilities. The aim was to develop competitive electric vehicles. The partnership first unveiled its Vision-S concept at CES in 2020.
Broader Industry and Corporate Context
The discontinuation of the Afeela project aligns with a broader trend of adjustments within the EV industry, where some automakers are revising model lineups and absorbing losses.
Challenges in various markets have prompted a focus on more affordable EV models or delays in the transition to electric vehicles.
Honda's Strategic Shifts and Challenges
In relation to its wider strategy, Honda had previously canceled several other planned EVs, including models within the Honda Zero Series. Honda has also faced other corporate challenges, such as declining U.S. sales, an aging vehicle lineup, and a failed $60 billion merger plan with Nissan last year. Discussions regarding the future plans for the Sony and Honda joint venture are ongoing.