Sony Honda Mobility Halts EV Development & Sales – Full Refunds for Preorders

Sony Honda Mobility (SHM) announced Wednesday it is halting development and sales of its planned electric vehicles, including the Afeela 1, and will fully refund customers who placed preorders. The decision follows a strategic reassessment of its electric vehicle business by Honda Motor Co., which flagged a potential writedown of up to ¥2.5 trillion ($15.7 billion) earlier this month, according to CNBC.

The joint venture, established in September 2022 by Honda and Sony Group Corporation, cited an inability to utilize technologies and assets originally planned to be provided by Honda as the primary reason for the discontinuation. A statement released by SHM indicated the shift in Honda’s EV strategy left the venture without a viable path to bring the Afeela models to market, as detailed in a joint statement from Sony and Honda.

SHM had begun accepting reservations for the Afeela 1 last year, with a starting price of $89,900, and anticipated initial deliveries in California later this year. Plans for a second model, based on a newer prototype, were also under consideration for a potential launch as early as 2028. Customers who reserved the Afeela 1 in California will receive full refunds, the company confirmed.

The collapse of the venture represents a significant setback for both companies, which had aimed to combine Honda’s automotive engineering expertise with Sony’s prowess in software and gaming to compete in the rapidly evolving EV market. The partnership was unveiled with considerable fanfare in 2022, showcasing a prototype vehicle equipped with advanced entertainment and sensor technologies.

Honda indicated that the impact of this decision on its full-year consolidated financial forecasts would be immaterial. Sony similarly stated it does not anticipate a material financial impact from the discontinuation of the project, according to reports from MSN.

Despite the dissolution of the EV development program, SHM stated it will continue discussions with Sony and Honda regarding its future plans. The outcome of those discussions, and the long-term implications for the relationship between the two companies, remain unclear.