Sony Honda Mobility (SHM) said on Wednesday that it is scrapping the development and launch of both its Afeela 1 sedan and a second model that had been under development.
Both companies effectively ended the joint venture’s vehicle programme less than two weeks after Honda flagged an up to 2.5 trillion yen ($15.7 billion) writedown on its electric vehicle business.
The decision leaves Sony Honda Mobility — established in September 2022 as a partnership between Sony Group Corp. and Honda Motor Co. to build EVs — without a product and with an uncertain future.
The company said it will continue discussions with Sony and Honda “regarding its future business plans.”
Reservation holders for the Afeela 1 in California will receive full refunds, the company said in a statement.
What Happened
Honda announced on March 12 that it was cancelling three EV models planned for production in the United States — the 0 Series Sedan, the 0 Series SUV, and the Acura RSX — citing “recent changes in the business environment” including the removal of federal EV subsidies and intensifying competition from Chinese manufacturers.
The company said it expected total losses of up to 2.5 trillion yen, split roughly evenly between the current fiscal year and the next.
The Afeela 1 was to share key technologies and assets with the now-cancelled 0 Series.
With those resources no longer available, Sony Honda Mobility said it “does not have a viable path forward to bring the Models to market as originally planned.”
“As a result of Honda‘s reassessment of its automobile electrification strategy announced on March 12, 2026, SHM will not be able to utilize certain technologies and assets that were originally planned to be provided by Honda at the time of SHM’s initial business planning,” the company stated.
The announcement came just four days after Sony Honda Mobility held the grand opening of its Afeela Studio and Delivery Hub in Torrance, California on March 21 — a facility designed to serve as the brand’s delivery location and what CEO Shugo Yamaguchi called a space representing “how we envision the future of mobility — thoughtful, human-centric, and shared.”
The ribbon-cutting ceremony, attended by SHMA executives, the Mayor of Torrance, and Afeela 1 reservation holders, took place on Saturday.
By Wednesday, the vehicle those customers had reserved no longer existed.
The company also operates studio locations in Beverly Hills, Century City, San Diego, and San Jose.
Afeela’s Brief Life
The Afeela brand was conceived as a fusion of Sony’s entertainment technology and Honda’s automotive manufacturing expertise.
The Afeela 1 was to feature 40 sensors — including 18 cameras, one LiDAR, nine radars, and 12 ultrasonic sensors — with an EPA-estimated range of approximately 300 miles. It was to be priced from $89,900.
At CES 2026 in January, Sony Honda Mobility showcased a crossover SUV prototype as a potential second model, targeting a launch as early as 2028.
Just weeks ago, the company was still operating as though deliveries would begin in California before the end of 2026.
Honda’s EV Retreat
Honda‘s March 12 announcement represented one of the most dramatic financial reversals in the modern automotive industry.
The company said it now expects an operating loss of between 270 billion and 570 billion yen for the fiscal year ending March 2026, compared with a previously forecast operating profit of 550 billion yen — a swing of as much as 1.12 trillion yen in a single year.
It would mark Honda‘s first annual loss since the company began disclosing consolidated financial results.
“The situation changed far more rapidly than we expected,” CEO Toshihiro Mibe told reporters. “The suspension of EV subsidies in North America undercut growth, and competition in China meant we couldn’t provide attractive models or maintain our competitive edge.”
The three cancelled US models had been months from the start of production.
Honda had already completed trial manufacturing of the Afeela 1 at its East Liberty plant in Ohio and was preparing to begin building 0 Series vehicles at the neighbouring Marysville facility.
Honda also said it was writing down the value of some Chinese operations and abandoning its target of having 30% of global vehicle sales be electric by 2030.
The company plans to pivot to hybrids in the US market, targeting 2.2 million hybrid sales by 2030.
Canada Hub in Doubt
A spokesperson for Honda Canada said the company’s commitment to a C$15 billion ($11 billion) EV production hub in Alliston, Ontario — first announced in April 2024 — is being “evaluated as market conditions change.”
Honda suspended the programme last May as it reassessed the tariff environment and slowing EV demand. The automaker said it plans to revisit the timeline in 2027.
The original plans included a new EV assembly plant, a battery plant, and cathode active material processing facilities in partnership with Asahi Kasei.
