Will Sony Honda be able to sell enough Afeela models to break even again?
Sony Honda Mobility has reported a significant operating loss of ¥52 billion (approximately USD362 million) for the fiscal year ending in March, more than doubling its ¥20.5 billion loss from the previous year. The steep deficit comes as the company moves closer to the commercial launch of its first EV, the Afeela, a high-end sedan expected to hit the market later in 2025.
The Afeela, with a starting price of USD89,000, is positioned as a premium offering aimed at competing with established luxury EV brands. Despite the hype surrounding the vehicle, the joint venture has yet to generate any revenue, as deliveries have not yet begun. Will it change things for the brand for the better though? Let’s hope so.
Moreover, the absence of income has contributed to the mounting losses, which reflect the considerable upfront investment required to bring a new vehicle to market. Sony Honda Mobility was established in 2022 as a strategic partnership between Sony Group and Honda Motor Co.
The venture seeks to merge Honda’s well-established manufacturing and automotive expertise with Sony’s strengths in digital technology, software, and entertainment. Their goal is to create a distinctive offering in the growing premium EV space, differentiating through user experience and advanced in-car tech.
Industry analysts also remain cautious about the company’s near-term financial prospects. They note that the electric vehicle segment remains highly competitive and capital-intensive, with many new entrants struggling to achieve profitability.
On top of that, even with premium pricing, low initial production volumes and high development costs are likely to continue weighing on the venture’s financials in the early years. Nonetheless, the parent companies remain in strong financial positions. Combined, Sony and Honda reported over ¥2.6 trillion in operating profit for the same fiscal year.
This financial cushion gives the joint venture room to invest in development, marketing, and future innovations without immediate pressure for returns. As the Afeela approaches its launch, the focus will be on how well the market receives the new EV and whether Sony Honda Mobility can begin to reverse its losses through sales growth.
The coming year will be a critical test of whether the joint venture can translate its ambitious vision into commercial success in a crowded and rapidly evolving EV landscape.
