Sony and Honda Scale Down Electric Vehicle Joint Venture

In a significant shift for the automotive industry, Sony and Honda have decided to scale down their joint venture, Sony Honda Mobility (SHM).

Launched in 2022 to combine Sony’s tech expertise with Honda’s manufacturing, the partnership originally aimed to create the AFEELA electric vehicle.

However, on March 25, 2026, the companies canceled plans for both the AFEELA 1 sedan and a second planned EV model.

This decision was driven by a cooling global electric vehicle market, the loss of tax incentives, and stiff competition from international rivals.

As of April 2026, the 400 employees of SHM are being reassigned back to the parent companies or their affiliates.

While the specific AFEELA vehicle project is officially dead, Sony and Honda insist the partnership is not fully finished.

This outcome highlights the current volatility in the EV sector, as many major manufacturers re-evaluate their long-term strategies and pivot toward more flexible options like hybrids amidst rising production costs and shifting consumer demand.