The joint venture between Sony and Honda has decided to discontinue its planned electric models, including the Afeela 1 electric sedan priced at $90,000 and the unnamed Afeela SUV concept. This decision comes amidst a broader context of decreasing demand for electric vehicles (EVs) and shifts in policy. Sony Honda Mobility (SHM) released a statement indicating that a “viable path forward” was no longer apparent after Honda adjusted its EV strategy in response to significant financial losses.
Earlier in the month, Honda disclosed plans to write down as much as 2.5 trillion yen (approximately $15.7 billion) associated with its EV investments. This marked a grim milestone for Honda, as it faced its first annual loss in over 70 years as a publicly traded company. Following this financial reevaluation, the automaker also canceled several other planned electric vehicle launches, including the Honda Zero Series Saloon and SUV.
SHM articulated that, since its inception in September 2022, the venture was focused on creating and marketing high-value mobility products by integrating Sony’s entertainment technologies with Honda’s automotive expertise. However, the reassessment of its electrification strategy announced on March 12, 2026, prevented SHM from leveraging certain technologies and assets that Honda initially planned to contribute. Consequently, SHM concluded that it did not possess a feasible strategy to bring these models to market as originally envisioned.
In light of this decision, SHM has committed to refunding customers who had placed $200 deposits to reserve the Afeela.
The Afeela had characterized itself as much more than just a conventional vehicle, showcasing a focus on integrating entertainment into the driving experience. Equipped with expansive screens across the dashboard and 40 sensors and cameras designed for semi-autonomous driving assistance, it was also expected to feature augmented reality elements. Sony had previously announced that PlayStation 5 owners would be able to stream games directly through the vehicle’s infotainment system.
Unfortunately, the cancellation of the Afeela reflects a larger trend of retreat within the auto industry regarding electric vehicle development. Despite rising gas prices and increasing consumer interest in EVs, many automakers are retracting their model lineups in the face of substantial losses. Some companies are racing to develop more affordable options to compete with an influx of low-cost Chinese EVs, while others are delaying their transition to electric offerings altogether. Although EV sales are on the rise in both Europe and China, automakers in these regions are also grappling with significant challenges.
