Honda, Sony halt joint EV development project

Tokyo: Honda and Sony said Wednesday they will put their electric-vehicle project on hold as they assess its future in a changing global market.

Sony Honda Mobility (SHM), a joint venture set up in 2022, will “discontinue the development and launch of its first model, AFEELA1, and its second model”, the Japanese firms said in a statement.

The statement pointed to “Honda’s reassessment of its automobile electrification strategy” and said the assumptions underlying the EV joint venture had “fundamentally altered”.

Earlier this month, Honda said it was booking major losses related to EV operations, and cancelled the launch and development of certain models in North America.

Honda at the time pointed to the abolition of US tax incentives for EV purchases and the easing of fossil fuel regulations, as well as a decline in the competitiveness of its products in Asia.

Profitability of Honda’s auto business was hurt by US tariffs, the company added.

Sony and Honda said Wednesday they have decided to “review SHM’s business direction”, without specifying a date for the next announcement.