Sony Honda Mobility, the joint venture between Japanese electronics giant Sony and carmaker Honda, said on Wednesday it would discontinue the development of the Afeela electric vehicles.
Given Honda’s overhaul of its EV business announced earlier this month, Sony Honda “does not have a viable path forward to bring the (EV) models to market as originally planned”, the joint venture said in a statement.
Sony Honda will issue full refunds to those who have made reservations for what was to be its first model, the Afeela 1, in California, it added.
Earlier this month Honda announced it would register its first annual loss in almost 70 years as a listed company, hit by up to $15.7bn in restructuring costs at its EV business, as weaker-than-expected demand for the technology hammers carmakers.
Under President Donald Trump, Washington has ended government support for EVs, forcing the likes of Ford and Stellantis to rethink their strategies and book hefty write-downs of their own.
Japan’s second-largest carmaker said it expects a hit of up to 2.5 trillion yen as it cancels three EV models planned for production in the US.
CEO Toshihiro Mibe told a press conference that EV demand had fallen sharply, making it “very difficult” to sustain profitability.
Honda is also writing down the value of its China business, where it has struggled to compete with the advanced, software-driven cars of rivals such as BYD.
Several global automakers have booked painful write-downs as they scaled back their EV ambitions in recent months.
Honda’s charge brings the industry tally to about $67bn. General Motors has warned of a $7.6bn hit, while Stellantis has flagged $25bn and Ford $19bn.
In addition to its main markets of Japan and the US, Honda said it will strengthen its model line-up and cost competitiveness in India, where it sees scope to expand.
Under pressure from Chinese rivals across Asia and elsewhere, Japanese automakers have increasingly focused on India, a market where — like the US — Chinese carmakers are effectively shut out.
The company plans to announce a revamped mid-to-long-term business strategy in the next fiscal year.
Reuters
