--- title: "Honda and Sony's dream of making cars shattered! The Afeela project comes to a sudden halt, and the cost alarm for traditional automakers' electrification rings again" type: "News" locale: "en" url: "https://longbridge.com/en/news/280463894.md" description: "Honda and Sony have abandoned the Afeela electric vehicle project and are reassessing their partnership. The two companies stated in a statement that the development plans for the first and second generation Afeela electric vehicles will be immediately shelved. This decision reflects the pressure faced by traditional Japanese automakers in the transition to electrification. Honda's CEO had warned that the company would face electric vehicle-related costs of up to 2.5 trillion yen. This news led to a slight decline in Honda's ADR in the U.S. stock market, while Sony's ADR remained relatively unchanged" datetime: "2026-03-25T11:31:19.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/280463894.md) - [en](https://longbridge.com/en/news/280463894.md) - [zh-HK](https://longbridge.com/zh-HK/news/280463894.md) --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/280463894.md) | [繁體中文](https://longbridge.com/zh-HK/news/280463894.md) # Honda and Sony's dream of making cars shattered! The Afeela project comes to a sudden halt, and the cost alarm for traditional automakers' electrification rings again According to the Zhitong Finance APP, Japanese automotive manufacturing leader Honda Motor Co. (HMC.US) and Japanese technology and entertainment giant Sony Group Corporation (SONY.US) have abandoned their grand plan to jointly develop an electric vehicle, and will soon reconsider their previously established partnership as the financial fundamentals of this large Japanese automaker deepen. The implications of this latest development for Japan's ambitious electric vehicle industry landscape are not just "a project failure," but rather a concentrated exposure of the multiple pressures faced by traditional Japanese automakers in the transition to electrification (EV). The two Japanese companies announced in a joint statement on Wednesday that the development plans for the first and second generation Afeela electric vehicles will be immediately shelved. They will also reassess their joint venture Sony Honda Mobility Co., which was established in 2022. Following the news, Honda Motor (HMC.US) saw a slight decline in its ADR trading price in the U.S. pre-market, while Sony (SONY.US) saw little change in its ADR trading price. Honda and Sony's decision to abandon the Afeela project—this high-end electric vehicle originally combined Honda's top-tier vehicle development and manufacturing capabilities with Sony's expertise in high-performance chips, image sensors, and entertainment—highlights the operational cash flow pressures faced by traditional Japanese automakers amid rising electric vehicle development costs. Honda's CEO Toshihiro Mibe warned weeks ago that the company would face 2.5 trillion yen (approximately $15.7 billion) in electric vehicle-related costs, and he expects to announce a new business expansion plan in May. Yasuda Hideki, a senior analyst at Toyo Securities, stated, "Honda has already announced a comprehensive restructuring of its electric vehicle business, so the market was already concerned about the future development of Afeela. This is an important driving factor for Sony, so it should continue to push forward, regardless of Honda's involvement." According to the automaker, customers who have already ordered the first generation Afeela will be able to receive a full refund. Honda has also canceled the development and launch of three electric vehicles originally planned for the North American automotive market, and it expects its operating loss indicator for the fiscal year ending in March to be between 270 billion yen and 570 billion yen. The so-called Afeela EV Project is essentially a high-end pure electric vehicle project led by the joint venture Sony Honda Mobility established by Sony and Honda in 2022, which aimed to combine Honda's vehicle engineering and manufacturing capabilities with Sony's software, sensors, entertainment, and digital cockpit capabilities to create a high-end electric vehicle more inclined towards "software-defined vehicles." According to previous public plans, the first model, Afeela 1, was scheduled for large-scale delivery in California in late 2026, with a starting price of $89,900, and there were even plans to launch a second high-end model in 2028. However, after reassessing its own EV strategy, Honda no longer has a viable path to bring the Afeela series to market For the Japanese electric vehicle industry, the significance of this matter is not just "the failure of a large EV project," but rather the triple pressure faced by traditional Japanese automakers in their EV transformation has been concentrated and exposed: the first layer is undoubtedly the increasing cost of developing high-end electric vehicles, with Honda warning this month that its EV business could incur losses of up to 2.5 trillion yen (approximately 15.7 billion USD), and battery vehicles accounted for only 2.5% of its global sales last year; the second layer is that Japanese automakers are simultaneously under siege from competition in China, changes in U.S. policies, and fluctuations in automotive demand amid global economic growth uncertainty; the third further illustrates that the Japanese government's attitude towards electrification is not resolute enough, and in the future, Japanese automakers are more likely to continue strengthening hybrids, selectively pursue EVs, and accelerate alliances or consolidations, rather than all companies independently betting on full-stack pure electric vehicles. In other words, the cancellation of the Afeela project represents that the Japanese electric vehicle industry is transitioning from the "concept cooperation phase" to the "cash flow and survival priority phase." ### Related Stocks - [Honda Motor Co., Ltd. (7267.JP)](https://longbridge.com/en/quote/7267.JP.md) - [Honda Motor Co., Ltd. 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