Sony-Honda vehicles might end up with competing dealers

TOKYO — When Afeela, the new electric vehicle brand created by Honda Motor Co. and Sony Corp., starts delivering cars in 2026, it won't just consider Honda and Acura dealers to service them.

In the U.S., the new EV venture may also look to brands outside the Honda and Acura dealer networks — including retailers from rival automakers.

"Not only Honda dealers. There may be several opportunities," Yasuhide Mizuno, CEO of Sony Honda Mobility Inc., said about plans for Afeela's critical after-sales network.

"It might be that is the best way for the customer," he said.

Rethinking retail, even if it means disrupting relations with franchised dealers, exemplifies the nothing-is-sacred mindset of Sony Honda Mobility in its quest to reinvent the auto business.

Super-powerful computer chips, extra-long leases, exporting from the U.S. to Japan, video game tie-ups — not to mention, the temerity to team two of Japan's most iconic brands from vastly different industries — all underscore the bold, experimental nature of the 50-50 joint venture.

Even the oddly avant-garde brand name Afeela seems to test new sensibilities.

In Jan. 31 interviews with Automotive News, the new partnership's top executives described their mission as combining the best of both companies to deliver a new kind of EV. While acknowledging that the first vehicle — an all-wheel-drive sedan — is still a work in progress, Mizuno and COO Izumi Kawanishi talked product specs, marketing, sales strategies and more.

"It's a new challenge," said Mizuno, dispatched to the startup from Honda, where he served as global head of automobile operations. "There is no previous experience to compare it with."

But their plans are sure to rankle Honda and Acura's U.S. franchised dealers, with many of them already leery of the venture's intention to sell its vehicles online instead of through their dealerships.

Many Honda and Acura dealers assumed they would at least serve as the official customer-facing part of the equation, delivering the Sony-Honda EVs, servicing them and communicating with owners about Honda's other products.

Bill Feinstein, chairman of the Honda National Dealer Advisory Board, was surprised to learn otherwise.

He told Automotive News dealers had not been advised that the Sony venture will work through other networks. But he had previously voiced worry the new brand could possibly compete with existing Honda dealerships.

"Unfortunately, there has been a lot of speculation and rumor regarding the Afeela product," Feinstein said. "What I do know is that Honda dealers strongly believe that products designed and/or produced by Honda should be sold by Honda dealers."

But Afeela is looking to upend convention.

Retailing will be through online sales and leases. Leases are expected to be five years or more, compared with the industry's typical turnover of three years today, Mizuno said.

Long leases will be possible because Afeela will be "software defined," the executives said. The latest functions and features — from autonomous driving to infotainment — will simply be downloaded from the cloud into the onboard computer, giving the car a longer life.

Designers from Sony and Honda strove for clean, technical, timeless exterior styling, with rounded edges and minimal creasing, for just this reason. The look has to last up to a decade.

"We have to maintain attractiveness for 10 years," Mizuno said. "This is our concept."

The executives said the design of the first car will be finalized this year.

They also made it clear their venture is not beholden to Honda. Sony-Honda, they insist, is an independent joint venture.

Mizuno, who resigned from Honda in December to take up his new post, said his priority is to make the Afeela brand a success, even if that means ruffling feathers.

"The customer might feel this is Honda's company or maybe this is Sony's company," he said. "But basically, Honda Motor is completely segregated from Sony-Honda."

Looking outside Honda's dealer network for after-sales could become one of those flashpoints. Mizuno said Afeela will comply with franchise laws and that Honda and Acura dealers are "candidates" for the servicing work. Those retailers may be attractive partners because they will be accustomed to servicing the e:Architecture platform coming soon from Honda.

But other dealers may also be considered, he said, adding that service shop location and market penetration is one consideration. Sony-Honda will talk with dealers after the company decides.

"We have to consult after we decide our direction," Mizuno said. "At this point, we are thinking about what is the beneficial point to the customer."

That argument might be hard for U.S. dealers to swallow.

The Afeela will be engineered by Honda, built at a Honda assembly plant in Ohio and exported from there to Japan and Europe. It will be based on Honda's e:Architecture platform, a dedicated in-house EV platform.

Many technical details are still under wraps. But Mizuno said the car should achieve a driving range of at least 300 miles and have a combined motor output of at least 160 kilowatts.

Battery sourcing is still up in the air. They may use Ultium batteries, the power packs also being used in the EVs Honda is jointly developing with General Motors. Or the batteries may come from LG Energy Solutions. Honda and LG announced last month they will jointly manufacture lithium ion battery cells from 2025 at a new plant in Jefferson, Ohio, with production capacity of 50 gigawatt-hours.

Mizuno said Afeela production will be a small-batch, quality-over-quantity operation. Though he declined to give a number, he said volume will fall below 100,000 units.

The executives said the auto industry is on the verge of change.

Sony, inventor of the Walkman, and Honda, purveyor of the breakthrough CVCC engine used in the first-generation Civic, are pioneering a new cross-sector approach that marries consumer electronics with passenger cars, as automobiles become software-centric computers on wheels.

American tech giant Apple, for example, has pondered a plunge into automotive and was even rumored to be considering a tie-up with Hyundai.

Chinese players are also increasingly ambitious. Baidu, that country's counterpart to Google, is collaborating with BAIC Motor Co. to build and deploy a fleet of full-electric crossovers and robotaxis. Telecom network juggernaut Huawei Technologies Co. plans to invest $1 billion in EV development, while smartphone maker Xiaomi Corp. has said it wants to plow $10 billion into making pure-electric vehicles over the next decade.

For automakers, such tie-ups help slash development time and bring new services for customers, said Zhou Lei, a partner at Deloitte Tohmatsu Consulting in Tokyo. For tech companies, the new partnerships allow them to tap an entirely new revenue stream in the mobility field.

"They want to create a new business model," Zhou said. "In Japan, industries are traditionally very vertical, but this is a horizontal approach and a new case worldwide. Japan's auto industry needs this kind of venture to bring in new ideas and energy."

Sony said it is bringing a new twist to the automotive mix with a toolbox of digital technologies and its library of media content, courtesy of the company's movie, music and video gaming units. Afeela has also signed a partnership with Epic Games, creator of such hits as Fortnite, to develop an on-the-go entertainment space that "seamlessly" integrates the "real and virtual worlds."

The Afeela concept car was unveiled in January at CES in Las Vegas, bristling with 45 cameras and other sensors. Sony will provide optical sensors for automated driving functions and time-of-flight sensors for the driver monitoring system. It is even developing its first in-house lidar sensors to use on the car, said Kawanishi, who came from Sony.

The Afeela will be capable of Level 3 autonomous driving from the start, the partners promised.

To power all this digital gadgetry, Afeela's midsize sedan will get a high-spec microprocessor set from partner Qualcomm that is capable of rifling off 800 trillion operations per second. The chip sets in today's cars, by contrast, typically range from 10 to 50 trillion operations per second.

"That is very aggressive, very advanced technology in the mobility world," Kawanishi said.

Mizuno said that leaning on Sony's technology might slash the new-car development timeline by 20 to 30 percent, compared with Honda's traditional cycle.

— Carly Schaffner in Los Angeles contributed to this report.