Honda and Sony Halt Electric Vehicle Development
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Source: seekingalpha
- Joint Development Halted: Honda and Sony have decided to cease their joint electric vehicle development due to significant losses at Sony Honda Mobility and legal and distribution challenges surrounding the Afeela model, indicating a drastic reduction in the feasibility of their collaboration.
- Strategic Shift Impact: Honda's adjustment of its EV strategy complicates continued cooperation, reflecting the necessity for companies to adapt swiftly to market demands and internal strategic changes in the rapidly evolving EV landscape.
- Joint Venture Background: Sony Honda Mobility was established in 2022 as a 50-50 joint venture aimed at leveraging Sony's strengths in imaging, sensing, software, and entertainment alongside Honda's automotive engineering and manufacturing expertise, yet changing market conditions have hindered this vision.
- Market Reaction: Honda's $15.7 billion write-down in its EV business has led to its first annual loss since 1957, highlighting the challenges and risks it faces in the electric vehicle sector, which may affect investor confidence in its future growth.
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About HMC
Honda Motor Co Ltd is a Japan-based company principally engaged in the motorcycle business, the automobile business, the financial service business and the life creation business. The Company operates through four business segments. The Motorcycle segment is engaged in the research and development, production and sale of motorcycles, all-terrain vehicles (ATVs), side-by-side vehicles and related parts. The Automobile segment is engaged in the research and development, production and sale of automobiles and related parts. The Financial Service segment is engaged in the sales financing and leasing of its products. The Power Products and Other Business segment is engaged in the research and development, production and sale of power products and related parts.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strategic Shift Impact: Honda's adjustment of its EV strategy complicates continued cooperation, reflecting the necessity for companies to adapt swiftly to market demands and internal strategic changes in the rapidly evolving EV landscape.
- Joint Venture Background: Sony Honda Mobility was established in 2022 as a 50-50 joint venture aimed at leveraging Sony's strengths in imaging, sensing, software, and entertainment alongside Honda's automotive engineering and manufacturing expertise, yet changing market conditions have hindered this vision.
- Market Reaction: Honda's $15.7 billion write-down in its EV business has led to its first annual loss since 1957, highlighting the challenges and risks it faces in the electric vehicle sector, which may affect investor confidence in its future growth.
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- Consumer Perception of FSD: When considering Tesla's Full Self-Driving technology, consumers are influenced not only by the technology itself but also by Elon Musk, with negative sentiment accounting for 14%, highlighting the close relationship between brand image and the leader's personal reputation.
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See More
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- Strategic Shift Impact: Honda's adjustment of its EV strategy complicates continued cooperation, reflecting the necessity for companies to adapt swiftly to market demands and internal strategic changes in the rapidly evolving EV landscape.
- Joint Venture Background: Sony Honda Mobility was established in 2022 as a 50-50 joint venture aimed at leveraging Sony's strengths in imaging, sensing, software, and entertainment alongside Honda's automotive engineering and manufacturing expertise, yet changing market conditions have hindered this vision.
- Market Reaction: Honda's $15.7 billion write-down in its EV business has led to its first annual loss since 1957, highlighting the challenges and risks it faces in the electric vehicle sector, which may affect investor confidence in its future growth.
See More
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- Focus on Profits: Companies are increasingly prioritizing profits and returning cash to shareholders through dividends and buybacks.
- Impact of Currency: A weaker yen is contributing to enhanced earnings for exporters.
- Overall Economic Outlook: The combination of these factors is creating a more favorable environment for investors in Japan.
See More
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- e-Power Hybrid System: Nissan plans to introduce its new e-Power hybrid system in the U.S. market, which uses a traditional gasoline engine to generate power for electric motors, providing an all-electric driving experience and potentially enhancing Nissan's competitiveness in the hybrid market.
- Market Timing: With rising gas prices and slow EV adoption, Nissan's e-Power system is expected to meet consumer demands for fuel economy, as S&P Global Mobility forecasts hybrid sales to rise to 18.4% of new vehicle sales in 2023, a significant increase from last year.
- Powertrain Upgrade: Nissan has developed a more powerful 1.5-liter three-cylinder turbocharged engine for the e-Power system to improve efficiency at higher speeds and enhance driving dynamics, aiming to attract consumers who are hesitant about traditional hybrids.
- Global Success: Since its debut in Japan in 2016, Nissan's e-Power system has sold over 1.6 million vehicles in nearly 70 countries, demonstrating its global success and potential for similar recognition in the U.S. market.
See More
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- New Hybrid System: Nissan plans to launch its new 'e-Power' hybrid system in the U.S., which uses a traditional gasoline engine as a generator to power electric motors, providing an electric driving experience and enhancing Nissan's competitiveness in the hybrid market.
- Timely Market Entry: With rising gas prices and slow EV adoption, Nissan's hybrid vehicles are expected to capture 18.4% of new vehicle sales in 2023, a significant increase from 12.6% last year, reflecting strong consumer demand for fuel efficiency.
- Enhanced Powertrain: Nissan has developed a more powerful 1.5-liter three-cylinder turbocharged engine for the e-Power system to improve efficiency at higher speeds and meet American consumer expectations for driving performance, thereby increasing its market appeal.
- Global Success: Since its debut in Japan in 2016, Nissan's e-Power system has sold over 1.6 million vehicles in nearly 70 countries, demonstrating its global success and potential for similar achievements in the U.S. market.
See More
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- Middle East Market Disruption: The conflict will directly impact automotive sales in Iran and complicate inventory distribution and supply chain management in the Middle East, posing significant risks especially for rapidly expanding Chinese automakers.
- Oil Price Surge Expected: With one-fifth of the world's oil supply passing through the Strait of Hormuz, Iranian officials have indicated they will restrict passage, leading to short-term gasoline price increases that may push consumers towards EVs and hybrids, although this shift is still in its early stages.
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See More
