Sony Honda Mobility, the joint venture established by the two Japanese conglomerates, has decided to give up on the two “Afeela”-branded EVs that it has spent the last few years developing.
The decision comes after Honda announced earlier this month that it was doing a major about-face and canceling three electric vehicles planned for the U.S. market — a decision that could cost the Japanese automaker nearly $16 billion. Honda blamed President Trump’s tariffs and rising competition from China as reasons for that decision.
Sony Honda Mobility said Wednesday that it had planned to use “certain technologies and assets” from Honda to make and support the Afeela sedan and SUV, and that the Japanese automaker’s change in strategy left the joint venture in a position where it can no longer develop the vehicles. The Afeela 1 sedan was supposed to launch later this year with an eye-watering starting price of around $90,000.
It’s not clear what will happen next to the joint venture, or the several hundred employees it has in Tokyo and California. Sony Honda Mobility (SHM) said in a press release Wednesday that it will “continue to discuss and evaluate the future of” the joint venture with Sony and Honda, and that the parties will “jointly announce SHM’s future direction, mid to long-term positioning as well as contributions to the future of mobility at the earliest possible opportunity.”
The world first learned of Sony’s interest in building a car at the 2020 Consumer Electronics Show, when the electronics giant trotted out a concept vehicle called the Vision-S at the very end of its keynote presentation. The car was a major surprise, and even Sony seemed taken aback by how much attention the prototype received.
At the time, it seemed like the Vision-S was meant to be a showcase for Sony’s entertainment and electronics prowess. It featured a dashboard-spanning screen, 360 audio, screens for the rear passengers, and a suite of 33 sensors around the car. “This prototype embodies our contribution to the future of mobility,” Sony then-CEO Kenichiro Yoshida said during the event.
The Vision-S was also supposedly a working vehicle, built on top of a platform provided by major automotive supplier Magna. It’s never been completely obvious whether Sony initially intended to pursue an actual vehicle. But in 2022 it announced the tie-up with Honda and pledged to build the sedan and an SUV variant. In 2023, the two companies revealed the Afeela branding.
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The U.S. EV market has changed wildly since then, spurred by tariffs and the Trump administration’s retreat from laws that encouraged EV adoption. Multiple EV-only startups have gone out of business. Others have pivoted to hybrids and delayed their releases. Major automakers have canceled plans for multiple electric vehicles in development. The federal EV tax credit is gone, though state subsidies remain.
The market opportunity for the Afeela EVs seemed suspect long before Honda’s big announcement this month, though. The joint venture was coming into a market that was already full of luxury vehicles with sharper branding (like Rivian) and impressive technology (like Lucid Motors). The past decade has proven that starting up a new and sustainable automotive company in the U.S. is an enormously hard endeavor, even for the companies with big institutional backing.