Sony Honda Mobility on March 25, 2026 said it will stop development and the planned launch of its first model, the Afeela 1, and a second Afeela model. The joint venture between Sony and Honda, formed to build electric vehicles for the North American market, has effectively paused operations after a strategic shift at Honda undercut the venture’s underlying business assumptions.
Honda said it will record charges of up to almost $16 billion tied to the cancellation, a substantial hit that underscores the financial cost of abandoning the program. The companies pointed to several reasons for the decision, including newly imposed US tariffs, a slowdown in EV demand and weaker-than-expected product appeal in parts of Asia.
The partnership had attracted notable early interest, including reservations from buyers in California. Sony Honda Mobility said it will refund those early buyers and is reviewing the future direction of the joint venture, without committing to a new plan or timeline.
The move represents a major setback for both companies as they reposition their electric vehicle ambitions. It also illustrates broader pressures confronting the EV industry, from trade tensions and tariff exposure to shifting consumer demand that has left some programs economically vulnerable.
Honda’s choice to scale back its electrification push marks a significant pivot for the automaker, and it heightens questions about the viability of some EV programs given current market conditions and geopolitical headwinds. For Sony, the halt ends a high-profile experiment in combining consumer electronics pedigree with traditional automaking.
Original Reuters story: https://www.reuters.com/world/asia-pacific/sony-honda-mobility-cancels-ev-development-refund-early-buyers-2026-03-25/
