Sony Honda Mobility Cancels Afeela EVs and Restructures Joint Venture

Honda Motor Co. and Sony Corp. have canceled the Afeela EV program for North America and are restructuring their joint venture, Sony Honda Mobility.

The companies discontinued development of the Afeela 1 sedan and a planned crossover model, both of which were intended for U.S. production using Honda’s next-generation 0 Series EV platform. The sedan had been targeted for initial deliveries in 2026, with early production activity already underway in late 2025 at Honda’s East Liberty, Ohio assembly plant.

Sony Honda Mobility had planned to sell the Afeela vehicles through a direct-to-consumer model, bypassing traditional franchised dealership networks.

Following the cancellation, Honda and Sony will scale back operations at the joint venture and reassign approximately 400 employees back to their parent companies. The companies are also reviewing the structure and future direction of the partnership.

Honda’s broader reduction in EV investment allegedly drove the decision. Honda cited U.S. tariffs, weakening EV demand, and limited product appeal in Asia as key factors influencing the shift.

Scout Production Delays Emerge as Federal Court Allows Direct Sales Lawsuit to Proceed

A federal judge has allowed key claims to move forward in a lawsuit challenging Scout Motors’ direct-to-consumer sales model, while new forecasts indicate the company’s vehicle launches will be delayed beyond earlier expectations.

The California New Car Dealers Association (CNCDA) filed the lawsuit in April 2025 against Scout and Volkswagen Group of America, alleging the company’s plan to sell vehicles directly to consumers violates Cal. Veh. Code § 11713.3(o), which makes it unlawful for a manufacturer to, “directly or indirectly through an affiliate…compete with their franchisees in the sale, lease, or warranty service of new motor vehicles.”

On March 30, a federal district court denied significant portions of the defendants’ motion to dismiss. The court found that CNCDA plausibly alleged Scout operates as an affiliate of Volkswagen Group of America and competes with franchised dealerships. The ruling allows claims under California’s unfair competition law to proceed.

Importantly, the court rejected a central argument raised by Volkswagen and Scout that accepting $100 refundable reservation deposits does not constitute competition. The court determined that the dealer association adequately alleged that the reservation agreements themselves create competition in the sale of new motor vehicles.

While the litigation proceeds, updated industry forecasts show Scout’s product timeline extending. Production of the Traveler SUV is now expected to begin in September 2028, with the Terra pickup projected to follow in March 2030. These projections move beyond the company’s earlier target of starting customer production in late 2027 or early 2028.

Scout, established in 2022 as a subsidiary of Volkswagen AG, continues developing its South Carolina manufacturing facility as it prepares for eventual production. Additional lawsuits in other states are also challenging the company’s direct-to-consumer sales approach.