The structural limits of alliances between automakers and information technology companies are becoming increasingly apparent as their collaborations to challenge Tesla in the electric vehicle era have failed to produce results. While Tesla surged ahead through rapid decision-making, automakers and IT firms have been unable to overcome fundamental differences in mindset and decision-making. The retreat of U.S. EV support programs is now dimming what remained of their hopes.
Sony and Honda's jointly pursued EV project has been scrapped, Japanese media outlets including Nikkei and Asahi Shimbun reported Sunday. On June 25, Sony Honda Mobility, a joint venture between the two companies, announced it would withdraw all plans to develop, launch and sell the Afeela electric vehicle.
The Afeela, once touted as a potential Tesla rival, had opened pre-orders in the United States and targeted deliveries in the second half of this year. The vehicle was priced at approximately $89,900 (about 120 million won). However, Sony and Honda declared the suspension of Afeela development and launch plans, and will issue full refunds to U.S. pre-order customers. Nikkei noted that demand for premium EVs is expected to decline sharply as the Donald Trump administration scales back EV subsidies.
The two companies partnered in September 2022 to pursue Afeela development and production. The EV drew attention as a futuristic vehicle combining Sony's digital software technology with Honda's automotive manufacturing expertise. The strategy included configuring the vehicle interior like a smart device and using the car as a platform.
However, as the project progressed, diverging perspectives between the two companies emerged, and voices within both Sony and Honda called for a reassessment of their futuristic EV strategy. Honda in particular reportedly expressed concern about automobiles being perceived as fast-turnover consumer goods like smartphones and other IT devices.
"Cars, including EVs, need to be driven for more than 10 years with safety as the top priority. The prevailing view in the industry is that approaching vehicles as something to be replaced every two to three years like smartphones simply does not work in the market," an automotive industry official said. "Moreover, Honda recently estimated losses of up to 2.5 trillion yen (approximately 24 trillion won, or $17 billion) in its review of its EV business, which I understand added to the burden of Afeela development and production."
