Honda's $15.7 Billion Retreat: Three EVs Canceled, Sony Afeela Dead, No New Models Left

On March 12, Honda Motor announced it would cancel three electric vehicles that had been planned for production in North America. Two weeks later, the Afeela sedan, Honda's high-profile joint venture with Sony, was killed too.

The restructuring costs: up to $15.7 billion.

What happened to Afeela

Sony Honda Mobility (SHM) said on March 25 that it was discontinuing development of both the Afeela 1 sedan and a planned SUV follow-up. The reason was blunt: Honda withdrew the technologies and production assets that SHM had been counting on. Without those, SHM said it "does not have a viable path forward to bring the models to market as originally planned."

The Afeela 1 had been positioned as a tech showcase, blending Sony's entertainment software with Honda's engineering. It was supposed to start deliveries in North America in 2026. Instead, it joins a growing list of EV projects that burned through capital without reaching customers.

The pipeline problem

Honda's decision to cancel three North American EV models leaves the company with almost nothing new for its largest profit market. The automaker cited "recent changes in the business environment," a vague explanation for a retreat that touches every part of its electrification roadmap.

Nikkei reports that speculation about a dividend cut is growing, though Honda has so far maintained its payout by pointing to its DOE (dividend on equity ratio) policy.

What it means for Japan's auto industry

Honda's pivot away from EVs runs counter to the direction of nearly every major competitor. Toyota is expanding its EV lineup. Hyundai is building humanoid robot factories. BYD is shipping 300,000 vehicles a month.

Honda bet on electrification, spent billions, and pulled back. The $15.7 billion in restructuring costs is the price tag. The harder question: what does Honda sell in 2027?

Sources: Nikkei Asia, Honda Global Newsroom, InsideEVs, Autonews