Sony and Honda team up to develop electric cars 

Author: Editorial
event 31.01.2023.
Foto: Shutterstock

Sony’s foray into the automotive industry is ripe for cynicism. Even the name Afeela elicits more eye rolls than serious facial expressions. However, here is why you should take it seriously.

Apple’s Project Titan has been the greatest four-wheeled mystery in the world for almost a decade. What would an Apple Car look like? Why would a consumer tech company enter the auto industry? Who would make it, and how would they market it? And what would it imply for the ongoing electric and digital transformation of the automotive industry?

However, Sony (and not Apple) has recently come into prominence as the tech juggernaut that may have discovered how to make the “rubber meet the road.”

From 2026 on, the Japanese electronics and media conglomerate will collaborate with Honda to produce a new electric vehicle under the “Afeela” brand. The vehicle would likely be produced at Honda’s US manufacturing facilities in order to benefit from new EV tax credit regulations. For in-car entertainment, it will mainly rely on subscription features and Sony’s own enormous collection of video games and other media products. If those technologies can become advanced enough to finally ship to customers, those services might be used by drivers and passengers while they wait for the EV to charge or when autonomous driving features are implemented.

According to executives who spoke to The Verge, if this joint venture from what is now known as Sony Honda Mobility does reach the market in three years, they’re in it for the long run, not just as an experiment. At this year’s Consumer Electronics Show, the venture’s CEO, Yasuhide Mizuno, told reporters that the company is considering lease agreements for up to 10 years, which is much longer than the average length of ownership for cars today, backed up by regular over-the-air software updates and new features. 

“If we sell the vehicle itself, we have to support it for 10 years, a very long time to provide our services,” Sony Honda Mobility’s chief operating officer Izumi Kawanishi said in an interview with The Verge. “Basically, it is a long-term business.” 

Moreover, Kawanishi was very explicit about why Sony is getting into the car business at all: to chase a new business model that has the potential to revolutionize the sector as we now know it.

“The important thing is software,” Kawanishi said. “We have to strengthen our software technology. That means we can provide mobility services for the future. We have to change the business from hardware to software.” 

This has been in the works for a while at Sony. The Vision-S, which was presented at the same show in 2020 before Honda became engaged in the project, evolved into the Afeela prototype, shown at CES. And in 2022, a seven-seat SUV concept was introduced.

The most recent prototype is a stylish EV sedan that resembles a cross between a Tesla and a Lucid Air. With screens across the width of the dashboard, 45 sensors, and cameras for semi-automated driving assistance, all-wheel drive, and hints of AR integration and “virtual worlds” integrated into the driving experience, it offers a host of advanced features. As a result, Sony’s entry into the automotive industry already seems to be positioned to compete with some of the leading companies in the premium EV space.

“It’s definitely interesting,” said Jessica Caldwell, an auto industry analyst and executive director of insights at car-buying website Edmunds. “These are brands that are extremely established in their fields, and I think that is going to be very important moving forward in getting the customer to trust these vehicles as more autonomous features are added.”

She said that the Afeela car seemed to be more concerned with serving the requirements of its passengers than anything else, despite not being as spectacular on the outside as the Tesla Model S was when it first appeared.

Serious competitors

When it comes to the companies Sony and Honda, one is the biggest electronics business in Japan, the market leader for console gaming, and one of the most powerful forces in music, TV, and film production; while the other is one of the biggest automobile manufacturers in the world with a well-deserved reputation for dependability and quality.

“This is two of Japan Inc.’s best-known, finest companies in their respective fields coming together,” said Tyson Jominy, VP for data and analytics at automotive research firm JD Power. “When you combine a consumer electronics company with the auto space, I guess the expectation is that magic will happen.”

As for Honda, Jominy says, “They’re known for their manufacturing excellence. Sony has found a fantastic partner, certainly one of the most blue-chip of blue-chip auto companies to partner with.”

Afeela’s coming-out celebration at CES seemed very much like Sony’s display rather than Honda’s. The car’s media relations were handled by Sony, and it was unveiled as part of a larger keynote presentation that also featured a trailer for Neill Blomkamp’s upcoming Gran Turismo movie and accessible game controllers for people with mobility challenges.

Honda has a lot to gain as well. Rarely do we see any Japanese companies actively considering the EV market. In the field of battery electric vehicles, brands like Honda, Toyota, Mazda, and Nissan lag well behind their South Korean, European, and American rivals. Even the Prologue crossover, which will be Honda’s first fully contemporary EV, will employ General Motors’ Ultium EV platform rather than internal hardware.

With Honda, Sony gains a partner that is both reputable and has a significant manufacturing presence in the US; in fact, Honda’s infrastructure for making cars in this country is now so strong that almost all Hondas and Acuras sold in the US are also produced there. By doing this, Sony would be able to take advantage of recent amendments made to the Inflation Reduction Act, which now allow for the maximum EV tax incentives when a car and its battery are manufactured in North America; and indeed, Honda is now building a $4.4 billion battery plant in Ohio.

“If you look at Tesla, Rivian and others, where they really get tripped up is production,” Jominy said. “Everything is great until the plant starts to open.” 

Why does Sony want to make a car?

Despite the fact that both Sony and Honda are powerful companies, making cars is difficult. Low profit margins, costly overhead, challenging manufacturing, and diverse sales strategies from country to country all play a role.

However, executives at Sony Honda Mobility who spoke to The Verge say the automotive space is seen as the next logical frontier for Sony’s media business, enabling it to soon offer movies, music, TV shows, and gaming in cars.

According to COO Kawanishi, Sony is also launching cloud platforms for automakers. Last year, the company announced features like custom user settings being stored in the cloud, remote driving technology for autonomous applications, and the ability to remotely play streaming games. 

“To me, it seems from Sony’s perspective, this is a full integration of its users, from home to work via your car and everything in between,” Jominy said. “It’s now an extension that lets us take our personal lives portable.” 

Kawanishi said that Sony had conversations with multiple car companies as potential partners on the project but declined to name them. It’s also unclear if Afeela was ever intended to compete with an Apple Car – a Sony Honda Mobility spokesperson did not directly comment on whether Sony’s project was meant to be a competitor.

Automobiles’ digital future?

Jominy said that while he understands the business models both partners are going for, he still sees the potential obstacles to Afeela’s success. For one, three years is a long time in the automotive business. Over the next few years, 20 to 25 new EV models are expected to be released annually, other startups are learning how to break into the market, and China is also attempting to enter the US market.

Should Sony Honda Mobility succeed (which is far from guaranteed), the model says a lot about where the automotive industry is going to go next, and not even for obvious things like in-car gaming. 

The point of Afeela cars isn’t about profiting from selling individual cars or dealerships making money from repairs; they’re about longer-term leases and financing arrangements and owners paying for various upgrades and features over the vehicle’s lifespan.

Jominy believes that this shift to subscription services is unavoidable, particularly in light of the fact that automakers must adhere to price caps set by the Inflation Reduction Act in order for their vehicles to be eligible for tax incentives. Automakers could counteract that by maintaining base car prices while incorporating more features that drivers would eventually have to pay for.

I“It’s like the smartphone business,” Kawanishi stressed. “The hardware is not so much the key… the mobility industry should be changed to that kind of model.” 


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