Sony-Honda joint EV 'AFEELA' program halted
Market slowdown could trigger up to 23 trillion KRW (approximately $17.25 billion) in losses
HYBE-led strategic shift
As Honda conducts a comprehensive review of its EV strategy, it has stopped work on the electric vehicle program advanced by Sony Honda Mobility.
Honda has decided not to bring to market the AFEELA electric sedan and SUV it co-developed with Sony.
The program had reached the final pre-production stage, underscoring how abruptly Honda shifted course.
The move is more than a model cancellation; it signals a broad recalibration of Honda’s electrification plans.
Market shifts deal a direct blow…
U.S. and China emerge as pivotal variables
Honda has been pursuing an EV expansion aimed at carbon neutrality by 2050. But rapid changes in market conditions have forced it to alter those plans.
In the U.S., shifts in EV subsidy rules and regulatory changes have cooled market momentum.
In China, the competition has shifted from raw performance to software and software-defined vehicles (SDVs), allowing newer EV entrants to gain ground quickly.
Those shifts have pressured legacy automakers like Honda and directly prompted a strategic rethink.
Potential hit up to 23 trillion KRW (approximately $17.25 billion)…
Aftershocks from EV investments
The strategy pivot will saddle Honda with significant financial costs. Cancelling the EV program requires the company to record impairments and disposal charges on production facilities and development assets.
Honda expects to record up to ¥1.12 trillion (approximately $7.50 billion) in operating charges and up to ¥150 billion (approximately $1.01 billion) in equity-method losses in the current fiscal year.
Including additional costs, total write-downs could reach about ¥2.5 trillion (approximately $16.75 billion) — roughly 23 trillion KRW (approximately $17.25 billion), according to company estimates.
Industry observers say the case illustrates the tangible \"strategy-adjustment\" costs that can arise during the transition to electric vehicles.
HYBE-led reorganization
A pragmatic pivot
Honda plans to reorient its auto operations around HYBE-led initiatives. With EV market growth trailing expectations, the company says it will prioritize areas with a steadier demand base.
Honda will keep Japan and the U.S. as core markets while expanding its lineup and sharpening price competitiveness in high-growth markets such as India.
Honda will publish a mid-to-long-term strategic plan in May to outline its next steps.
Analysts say the move looks less like an abandonment of EVs and more like a market-driven decision to slow the pace of electrification.
