Sony Honda Mobility halts Afeela EV development and sales

Sony Honda Mobility announced Wednesday it will discontinue development and launch of its Afeela 1 sedan plus a planned second SUV model.

The decision follows Honda's reassessment of its EV operations, leaving the joint venture without viable paths to market. Honda flagged up to 2.5 trillion yen ($15.7 billion) in charges earlier this month tied to canceled North American models.

Sony Honda Mobility cited fundamental shifts in global EV assumptions. U.S. tax credit eliminations and regulatory easing for fossil fuels eroded economics alongside Asian competitiveness declines.

The partnership formed in 2022 combined Honda's engineering with Sony's software and entertainment assets. Afeela targeted premium buyers through gaming interfaces and advanced sensors showcased at CES prototypes.

Honda absorbed separate writedowns on its 0 Series Saloon, SUV and Acura RSX projects built for Ohio plants. Those cancellations left Prologue as its sole U.S. EV alongside potential GM collaborations.

Executives committed to refunding early reservation holders. The venture pledged continued evaluation of future cooperation without timelines.

Shares of Sony rose 1 percent while Honda gained fractionally. Neither flagged material financial hits from the specific cancellation.

EV industry retreats accelerated across legacy players. Ford, GM, Stellantis and Volkswagen booked over $70 billion combined charges since tax incentives expired.

Honda projected first annual loss since the 1950s. Management admitted failure to match value propositions from newer pure-play rivals.

Sony Honda Mobility eyed 2026 North American debuts blending PlayStation tech with autonomous features. Market shifts killed premium pricing power.

Joint operations wind down orderly. Honda redirects resources toward hybrids regaining share in Japan and key export regions.