Honda and Sony lost $360 million on the Afeela car before sales even started
The joint electric car of Sony and Honda under the Afeela brand has not even gone on sale yet, and the project's losses have already exceeded $360 million (52 billion yen). Such an impressive minus company Sony Honda Mobility reflected in the latest financial reports - while a year earlier the deficit was "only" 20.5 billion yen.
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The losses are not limited to development costs. It's a testament to how expensive it is to enter the premium electric car segment, where everything from RDs to prototypes to software requires huge investments. And although the Afeela's starting price of $89,900 indicates serious ambitions, it will be extremely difficult to recoup the investment through sales alone.
However, Honda and Sony themselves are not at risk: the combined operating profit of the two Japanese corporations last fiscal year exceeded 2.6 trillion yen, Bloomberg reported. But the road to success in the automotive market won't be easy.
Afeela EV. Illustration: Sony Honda Mobility
Afeela is entering an arena where Tesla, Mercedes-Benz, BMW and Chinese brands are already firmly established. Nevertheless, Sony and Honda are confident in their abilities: the bet is on the combination of Honda's technical expertise and Sony's digital competences - from interfaces to multimedia and on-board entertainment.
And whether Afeela will become a new milestone or just an expensive experiment - the market will show. One thing is clear so far: even for industrial giants the transition to the electric future is not cheap.
Source: Bloomberg
