Sony and Honda discontinue Afeela EV joint venture

The joint venture announced today that it would be discontinuing the $90,000 Afeela 1 electric sedan, as well as the unnamed Afeela SUV concept, as it adjusts to slower EV demand and policy pullbacks. In a statement, Sony Honda Mobility (SHM) determined there was not a “viable path forward” after Honda recalibrated its EV strategy following steep losses.

Earlier this month, Honda said it would take a writedown of as much as 2.5 trillion yen ($15.7 billion) on its EV investments, representing the company’s first annual loss in over 70 years as a public entity. The automaker also put the kibosh on several planned EVs, including the Honda Zero Series Saloon and SUV. Now, the axe has fallen on the Afeela as well.

“Since its establishment in September 2022, SHM has aimed to develop and sell high value-added mobility products and to provide mobility-related services by combining the technologies, expertise, and development capabilities of Sony and Honda,” the joint venture said in a statement. “However, as a result of Honda’s reassessment of its automobile electrification strategy announced on March 12, 2026, SHM will not be able to utilize certain technologies and assets that were originally planned to be provided by Honda at the time of SHM’s initial business planning. In light of this change, SHM has determined that it does not have a viable path forward to bring the Models to market as originally planned.”

SHM said it would refund customers who deposited $200 to reserve a future Afeela.

In some respects, Afeela felt more like a platform for Sony’s entertainment offerings than a driving machine. It featured screens across the width of the dashboard, 40 sensors and cameras for semi-autonomous driving assistance, all-wheel drive, and hints at augmented reality integration and “virtual worlds” embedded into the driving experience. Sony recently said that Playstation 5 owners would be able to stream games directly on to the vehicle’s infotainment system.

But now, the Afeela has become the latest victim of the auto industry’s EV retrenchment. Even with gas prices soaring and more customers becoming EV curious, automakers are pairing back their model lineups and absorbing huge losses as a result. Some are scrambling to develop more affordable models to compete with an expected flood of cheap Chinese EVs, while others delaying the transition altogether. EV sales continue to climb in Europe and China, but automakers are facing challenges in those countries as well.