The high-tech automotive collaboration between Sony and Honda has come to an abrupt end. On March 25, 2026, the joint venture Sony Honda Mobility (SHM) officially announced the cancellation of the Afeela 1 electric sedan and a planned second SUV model.
The decision follows a historic retreat by Honda Motor Co., which is currently undergoing a ¥2.5 trillion ($15.7 billion) writedown of its entire electric vehicle strategy.
Why the Afeela Was Shelved
The Afeela project was deeply integrated into Honda’s now-cancelled “0 Series” EV architecture. Without the underlying platform and manufacturing support from Honda, the joint venture determined there was no viable path to production.
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Market Shift: Honda cited a significant slowdown in U.S. EV demand, fueled by the removal of federal subsidies and shifting regulatory priorities under the current U.S. administration.
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Financial Impact: Honda expects its first annual net loss in nearly 70 years (up to ¥690 billion) due to the massive costs of pulling out of these North American EV programs.
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Competition: Growing pressure from vertically integrated Chinese manufacturers (like BYD and Xiaomi) and Tesla made the high-priced $89,900 Afeela a difficult sell in a tightening market.
What Happens Next?
If you were one of the early adopters who placed a reservation for the Afeela 1 in California, the company has confirmed a full refund policy.
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Refunds: SHM will issue complete refunds to all reservation holders immediately.
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Future of the JV: While the Afeela car line is dead, Sony and Honda stated they are still discussing “future collaboration” that might focus on software-defined vehicle (SDV) technology rather than building physical hardware.
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Honda’s New Focus: Honda is pivoting back to its strength in hybrid vehicles, which continue to see strong sales and higher profitability in the current economic climate.
