Sony Honda Joint Venture Halts Afeela EV Project, Shifts to New Business Direction

On April 20, Sony Group and Honda Motor announced they would explore new business directions for their joint venture, Sony Honda Mobility (SHM). This follows SHM’s earlier decision to halt development and launch plans for its first model, the Afeela 1, as well as a second vehicle under development. The decision stems from Honda’s strategic realignment of its electrification roadmap. The Afeela 1 was originally scheduled to launch in North America in 2026 and in Japan in 2027, with a starting price of $89,900 (approximately RMB 650,000). Pre-orders had already opened for the vehicle, which was positioned as a premium all-electric sedan equipped with 40 environmental sensors, compatibility with Sony’s PlayStation 5 gaming console, and hardware capable of supporting Level 4 autonomous driving. Following the project’s cancellation, all customer deposits have been fully refunded. The immediate cause for scrapping the Afeela project was Honda’s announcement in mid-March 2024 that it would cancel development of three battery-electric vehicle models due to lower-than-expected EV demand in the U.S. market. Since the Afeela 1 shared its platform with these canceled models, SHM lost a critical manufacturing foundation. SHM currently employs approximately 400 people, and workforce reallocation has become a concern due to redundancies in departments such as marketing. The parent companies are considering absorbing some employees into their own organizations and aim to finalize a new business direction for the joint venture along with a personnel arrangement plan by the end of April.