As major automakers scale back their EV offerings, Sony and Honda are scrapping plans to launch a gadget-packed electric vehicle.
The move by Sony Honda Mobility comes weeks after Honda announced a $15.7 billion writedown of its electric vehicle business and said it would cancel planned production of three of its own electric models.
Sony Honda Mobility is discontinuing development and launch of the Afeela 1, a roughly $100,000 electric sedan packed with screens, speakers and artificial intelligence. The car was scheduled to hit the roads exclusively in California later this year.
“This decision follows discussions between our parent companies, after taking into account the significant impact of Honda's shift in electric vehicle strategy,” said Akiko Itoga, director of public relations at Sony Honda Mobility.
“The suspension of these [Honda] “These models significantly impact Sony Honda Mobility of America in finding a viable business case,” he said.
In a statement Wednesday, the company said it “would not be able to use certain technologies and assets that were originally planned” due to the sudden change in Honda's plans.
The company will issue refunds to customers who paid $200 to reserve a vehicle. He did not reveal the number of reservation holders.
Earlier this month, Honda reported its first annual loss in nearly 70 years as a publicly traded company. It is not the only automaker suffering losses on electric vehicles.
Ford took a $19.5 billion writedown and discontinued its F-150 Lightning electric pickup truck last year. Stellantis, maker of Jeep, Ram and others, took a $26.5 billion hit after moving away from electric vehicles in February.
“The way the market looks right now, it makes sense that they would close,” said Kristin Shaw, an auto industry analyst and writer. “It's a matter of time.”
The companies could still work together in the future, he said.
Despite an expected surge in interest in electric vehicles driven by sky-high gasoline prices, the market is not welcoming to newcomers right now. The average gas price in California was $5.83, according to AAA.
“Afeela could be shelved or scrapped,” Shaw said. “Right now, it's not going to work.”
The creators of Afeela tried to make a car, an entertainment system and a personal assistant in one. The discontinued vehicles were to have 28 speakers, immersive screens, an artificial intelligence assistant and an entertainment system for karaoke or Sony PlayStation games.
The company was also trying to achieve full autonomy in its vehicles. The Afeela 1 was equipped with 18 cameras, nine radars, 12 ultrasonic sensors and lidar, allowing it to qualify for level two autonomy, which requires a driver to be in control.
President Trump has rolled back electric vehicle incentives and requirements for automakers to sell green vehicles, leading to fewer options and declining public interest.
Tesla, the country's most popular electric vehicle, is pivoting toward artificial intelligence and self-driving technology as its electric vehicle sales lose steam. It discontinued its Model S and X in January. The company also lost a large number of customers last year as CEO Elon Musk's reputation took a hit.
Sony Honda Mobility said it will continue talks with Sony and Honda about future plans. Sony is not the only technology company that tried to enter the electric vehicle market: Apple worked on an electric vehicle for more than 10 years before closing in 2024.
