Sony and Honda Discontinue Afeela Electric Vehicle Project

Sony and Honda have announced the cancellation of their highly anticipated Afeela electric vehicle collaboration.

The joint venture confirmed today that it will discontinue both the $90,000 Afeela 1 electric sedan and the unnamed Afeela SUV concept as the companies adapt to evolving market conditions and reduced EV demand. Sony Honda Mobility (SHM) stated that it could not identify a "viable path forward" following Honda's strategic recalibration of its electric vehicle investments after reporting significant financial losses.

Earlier this month, Honda disclosed it would record writedowns of up to 2.5 trillion yen ($15.7 billion) on its EV investments, marking the company's first annual loss in over seven decades as a publicly traded entity. The automaker has also canceled several planned electric vehicles, including models in the Honda Zero Series lineup. The Afeela project represents the latest casualty in this strategic shift.

"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 stated. "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."

The company announced it will provide full refunds to customers who placed $200 deposits to reserve future Afeela vehicles.

The Sony-Honda collaboration first unveiled its Vision-S concept at CES in 2020, gradually progressing toward production over the following years. While the companies had not yet offered public test drives, they provided demonstrations of the vehicle's advanced infotainment system. SHM had begun trial production of the Afeela 1 at Honda's East Liberty Auto Plant in Ohio earlier this year and introduced an SUV concept at CES in January.

The Afeela represented a unique approach to electric vehicles, functioning as much as a technology platform as a traditional automobile. The vehicle featured dashboard-wide screens, 40 sensors and cameras for semi-autonomous driving capabilities, all-wheel drive, and planned integration with augmented reality and virtual environments. Sony had recently announced that PlayStation 5 owners would be able to stream games directly through the vehicle's infotainment system.

The cancellation positions Afeela among the growing number of electric vehicle projects being reconsidered as the automotive industry navigates shifting market dynamics. Despite rising fuel costs and increased consumer interest in electric vehicles, automakers are reducing model offerings and absorbing substantial financial losses. Many manufacturers are focusing on developing more affordable models to compete with anticipated low-cost Chinese electric vehicles, while others are delaying their electrification timelines entirely. While EV sales continue growing in Europe and China, automakers face challenges across global markets.

The future of the Sony-Honda joint venture remains uncertain, with the companies indicating ongoing discussions about their collaborative plans. Honda faces particular challenges with declining US sales and an aging vehicle portfolio. The company's proposed $60 billion merger with Nissan collapsed last year due to disagreements over the merged entity's organizational structure.