Afeela ends joint venture between Sony and Honda; refunds for buyers and EV recalibration

Sony and Honda are ending the SHM joint venture and discontinuing the Afeela 1 due to weak EV demand; buyers will receive deposit refunds and the EV strategy is being recalibrated.

End of the joint venture between Sony and Honda

The partnership between Sony and Honda Mobility announced today the end of the Afeela 1, a $90,000 electric sedan, as well as the unnamed concept SUV, citing lower EV demand and adjustments in mobility policy.

SHM explained that, with the recalibration of Honda's electrification strategy announced on March 12, 2026, there is no longer a viable path to bring the models to market as originally planned. Honda also reported a depreciation of up to 2.5 trillion yen in its EV investments, marking the company's first annual loss in over 70 years.

SHM added that due to the change in strategy, it will not be able to use certain technologies and assets originally planned by Honda, which impacts the launch schedule.

Because of this, the company assured customers who had already left a $200 deposit to reserve the Afeela that a refund will be issued.

History and products

The Vision-S project was first presented at CES 2020. Since then, the partnership has moved closer to production but without offering test drives. Earlier this year, SHM began test production of the Afeela 1 at the East Liberty Auto Plant in Ohio, and at CES in January, the concept SUV was also presented as a production promise.

Features and market context

The Afeela combined Sony's entertainment features with assisted driving capabilities, including 40 sensors and cameras for steering assistance, four-wheel drive, and augmented reality proposals with virtual worlds integrated into the interior. Sony also indicated that PlayStation 5 owners could stream games directly to the infotainment system.

Impact and next steps

The discontinuation of Afeela illustrates the contraction in the EV sector, with automakers reducing model lines and recording large losses due to lower demand. While some seek more affordable models to compete with new Chinese offerings, others will postpone the transition.

It is not yet clear what the fate of the joint venture between Sony and Honda will be, as they state they maintain discussions about future plans. Honda faces challenges with falling sales in the US and an aging lineup; last year, a merger with Nissan was ended due to disagreements over the group's structure.

Leave your comment: do you believe that partnerships between technology and automotive can still thrive in the high-value EV segment? What would be the ideal format for this type of collaboration?