Sony and Honda have decided to scale down operations at their electric vehicle joint venture, Sony Honda Mobility, after dropping plans for the AFEELA lineup.

The two companies said the current structure of the venture no longer works under the present business environment. Sony Honda Mobility, or SHM, was formed in September 2022 to combine Sony’s software and entertainment background with Honda’s automotive engineering experience.

The partnership planned to build a new kind of mobility business centered on connected and software-driven electric vehicles.

The decision follows Honda’s reassessment of its electrification strategy earlier this year. Sony, Honda, and SHM said they would discontinue development of the AFEELA 1 and a second planned model.

After further discussions, the companies said it would be difficult to bring products and services tied to SHM’s original vision to market in the short to medium term under the existing arrangement.

SHM will now review its structure while operations are reduced. Employees are expected to return to Sony, Honda, or related companies, depending on individual preferences.

The announcement brings an uncertain end to one of the more closely watched partnerships in the EV industry. When the AFEELA concept first appeared at CES in 2023, it drew attention for its large dashboard displays, entertainment features, and focus on software integration.

Sony executives promoted the idea of turning the vehicle into a digital entertainment space, while Honda handled vehicle engineering and manufacturing.

The production version of the AFEELA 1 later appeared at CES 2025 with semi-autonomous driving functions and a starting price near $90,000.

Industry observers questioned its position in a crowded premium EV market where rivals already offered longer driving range and stronger performance figures at lower prices.

Honda also recently halted plans tied to its 0 Series electric vehicle program and the revived Acura RSX EV project, both of which were connected to broader electrification plans in North America.

Despite the shutdown of the AFEELA vehicle program, Sony and Honda said they still plan to discuss future forms of collaboration.

The companies said they remain interested in software-driven mobility and advanced driver assistance systems as those technologies become more common in vehicles.