It has been revealed that Sony Group and Honda have decided to abandon the development of “AFEELA,” the electric vehicle (EV) project they had been jointly funding.
Ahead of the official announcement at 6:00 p.m. today, the automotive industry is in a state of shock.
A partnership between Sony and Honda, once Japan’s two leading giants. Why did this highly anticipated new EV come to an end without ever seeing the light of day?
The History and Setback of AFEELA Development
Since Sony unveiled the “VISION-S” at CES 2020, this project has garnered global attention.
In 2022, the companies established a joint venture, “Sony Honda Mobility,” and outlined the following roadmap:
- 2020: Sony unveils the “VISION-S” prototype
- 2022: Sony and Honda establish a new joint venture and announce the brand name “AFEELA”
- 2026: Plans to launch a sedan model, starting in California, U.S.
- January 2025: Announcement of the start of development for the second model, an SUV
It was anticipated to be a “mobile entertainment space” that fused Honda’s vehicle manufacturing technology with Sony’s entertainment software development capabilities, but the project was canceled before it even reached the market.
Background of the Development Cancellation: Slowing U.S. EV Market and Political Factors
The primary reason for abandoning development was the sharp slowdown in EV demand in the U.S. market, which had been the project’s main target.
In particular, in California—where Aphira was based—the Trump administration (as depicted in the 2026 setting) rolled back environmental regulations and drastically scaled back EV purchase incentives.
Consequently, a realistic assessment was made that even if a new high-end EV were launched, it would be impossible to achieve the sales volume necessary to recoup the investment.
Honda Posts First Net Loss Since Going Public: A Massive Loss of 2.5 Trillion Yen
Honda’s business situation is facing an unprecedented crisis.
In an announcement on March 12, the company revealed a fundamental overhaul of its EV strategy.
1. Development of multiple models, including “Honda Zero,” halted
The decision was made to halt development of multiple models, including not only the Afilia but also the flagship model of the next-generation EV brand “Honda Zero.”
As a result, the massive development costs invested to date will be recorded as impairment losses.
2. Projected Losses of Up to 2.5 Trillion Yen Over Two Years
Honda will record a loss of 1.3 trillion yen due to the write-off of EV-related assets and penalties associated with the development cancellations.
For the fiscal year ending March 2026, consolidated net income is expected to turn into a deficit of up to 690 billion yen.
Total losses over the two-year period could reach as much as 2.5 trillion yen.
3. De facto withdrawal of the “2040 engine-free goal”
Honda’s ambitious goal of “making all vehicles sold by 2040 EVs or FCVs (fuel cell vehicles)” has effectively been withdrawn due to the suspension of development and massive losses.
The company is expected to return to a more realistic strategy centered on hybrid vehicles (HEVs).
Summary: Japanese Companies’ EV Strategies Face a Major Turning Point
The failure of the “powerhouse partnership” between Sony and Honda symbolizes just how uncertain the global shift to EVs remains.
Honda’s struggle—unable to recoup its massive investments and suffering its first loss since going public—is a concern that other Japanese manufacturers cannot afford to ignore.
