Sony Honda JV pulls North American EV models
Sony Honda Mobility (SHM), a joint venture (JV) between Honda Motor and Sony made to develop Afeela EVs, has cancelled plans for its first two models.
The 50:50 JV, established in 2022, put out a statement that said assumptions about certain EV technologies were “fundamentally altered”, leading to a re-evaluation of its business direction.
The JV said that the decision was made due to Honda's recent pullback from its electrification strategy, as the OEM was going to provide "technologies and assets" to the JV for the vehicles.
“As a result of Honda’s reassessment of its automobile electrification of its automobile electrification strategy […] and factoring the changes to the EV market, the underlying assumptions of SHM’s business operations such as the utilisation of certain technologies and assets planned to be provided by Honda were fundamentally altered, resulting in the announcement by SHM today to discontinue the development and launch of its first model, Afeela1, and its second model.”
It said that in light of this, the JV "does not have a viable path forward to bring the models to market as originally planned". It will issue refunds to customers who made reservations for the first model, which were due to start being delivered late this year in California.
The JV reported a $362m operating loss for the year ending March 2025, with no recorded revenue yet since no vehicles have been delivered.
It follows the news earlier this month that Honda is cancelling the development of three EV models planned for North America as part of a reassessment of its electrification strategy. The OEM said: “Honda automobile business has fallen into an extremely challenging earnings situation due to various factors, including its inability to respond flexibly to these changes in the business environment, compounded by a decline in the profitability of gasoline and hybrid models due to the impact of newly imposed tariffs.”
The cancellation of EV models is part of a wider trend that is being seen across the world as the industry struggles to match supply and demand, with the imbalance being particularly felt in the North American market.
