(March 25): Honda Motor Co and Sony Group Corp have scrapped plans to jointly develop an electric vehicle (EV) and will rethink their partnership as the carmaker’s financial troubles deepen.
Development of the first- and second-generation Afeela EVs will be shelved effective immediately, the companies said in a joint statement on Wednesday. They will also re-evaluate Sony Honda Mobility Co, their joint venture established in 2022.
Honda and Sony’s decision to scrap the Afeela, a premium EV that combined Honda’s vehicle development and production capabilities with Sony’s expertise in image sensors and entertainment, underscores the strain on legacy automakers due to the mounting costs of EV development. Honda chief executive officer Toshihiro Mibe, who warned weeks ago of JPY2.5 trillion (US$15.7 billion or $20.1 billion) in EV-related charges, is due to announce a new business plan in May.
“Honda had already announced an EV overhaul, so there was concern about what would happen to Afeela,” said Toyo Securities Co analyst Hideki Yasuda. “It’s a big driver for Sony, so it should continue on, with or without Honda.”
Customers who had already placed orders for the first-generation Afeela will be fully reimbursed, according to the carmaker.
Honda has also cancelled the development and launch of three EV models planned for North America, and is forecasting operating losses of JPY270 billion to JPY570 billion for the fiscal year ending in March.
See also: China EV maker Voyah drops 13% in HK debut without fresh funds
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