SONY Group Corp and Honda Motor Co said Tuesday they have decided to scale down operations at their joint venture after they recently scrapped plans to develop and market two electric vehicle models.
Some 400 employees at Sony Honda Mobility Inc will be “reassigned” to its parent companies, Sony and Honda, or related entities, as the joint venture has concluded that it would be difficult to roll out products and services under the current structure in the short to medium term.
“Based on these conclusions, the companies have decided to review the current structure of SHM for the time being and scale down its operations,” they said in a joint statement. The decision follows Sony Honda Mobility’s announcement in March that it had scrapped planned electric vehicle models after Honda reviewed its electrification strategy amid a changing market environment. The Tokyo-based venture will remain as a company, though its operations will effectively be put on hold.
Set up in 2022, the venture had aimed to release its first model, Afeela 1, this year and another EV model sometime in or after 2028, both in the United States. Japan’s second-largest automaker by volume has been forced to rethink its EV push amid slowing US demand and fierce competition with Chinese rivals. For the fiscal year through March, Honda is expected to have incurred its first net loss since listing in 1957.
Automakers are facing headwinds in the EV market after US President Donald Trump abolished tax incentives for EV purchases last year, while the European Union has also revised its planned 2035 ban on the sale of gasoline and diesel cars.
Kyodo
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