Sony-Honda Joint Venture Sees EVs as Entertainment Hubs

The premium vehicles set to launch by 2026 will feature subscription services and Level 3 automated-driving capabilities.

October 17, 2022

ALEXANDRIA, Va.—Sony Honda Mobility, a joint venture by the two companies that focuses on electric vehicles, plans to deliver its first set of EVs by 2026, selling them online in the U.S. and Japan, reports CNBC.

The company will start taking pre-orders for the vehicle in the first half of 2025 and sales would begin before the end of the year. Deliveries would start in the spring of 2026 in the U.S., and Japanese deliveries would happen in the latter half of the year.

The EVs would be “priced at a premium” reports Reuters, and it would offer a software system by Sony that would be subscription-based, with owners charged monthly. The system could be a way to offer recurring revenue from entertainment and other services for Sony. The software would include features from onboard controllers to cloud-based services that will connect with entertainment and payment systems.

Details of the vehicles have not been released by the company, but representatives said the vision of the vehicle is that it would function like a rolling smartphone.

Also featured in the vehicle would be a “Level 3 automated drive under limited conditions and to enable Level 2+ driver assistance in even more situations such as urban driving.”

There are five levels of driving automation as defined by SAE International, an association made up of technical experts and engineers. On its website, the SAE refers to Level 2 as providing “Partial Driving Automation.” Level 3 automated features can “drive the vehicle under limited conditions and will not operate unless all required conditions are met.”

“As safe driving technology will continue to evolve and the amount of concentration required to drive will be reduced, we should consider new ways to enjoy and spend time in the cabin space as a whole,” said Izumi Kawanishi, the joint venture’s president and executive at Sony.

Reuters reports that the EV will likely be manufactured by Honda. Honda and LG Energy Solution announced last week that it chose Ohio to manufacture batteries for its electric vehicles. The plant is expected to cost $3.5 billion, and the joint venture will eventually invest $4.4 billion in the plant. Construction will begin in 2023, and the plant is expected to produce lithium-ion batteries by the end of 2025.

Honda plans to launch 30 electric vehicles by 2030, spending $40 billion in the initiative over the next decade and producing more than two million vehicles a year. It aims to have its vehicle fleet be 40% EVs by 2030. Honda pledged to phase out sales of internal combustion engine vehicles by 2040, and earlier this year, Honda issued $2.75 billion of green bonds that it will use to fund the development and production of EVs and fuel-cell cars.

Honda also announced it is partnering with General Motors to codevelop a line of affordable electric vehicles. The companies are working together to enable global production of millions of EVs starting in 2027, including compact crossover vehicles. The compact crossover segment is the largest in the world, with annual volumes of more than 13 million vehicles.

Some automakers are not placing all their investment into electric vehicles and are betting that car buyers aren’t ready to rely solely on electricity to get their motors going. Toyota, Sweden’s Volvo Car AB and Korea’s Hyundai Motor Co. are among other carmakers investing in hybrid car models, which are in hot demand by car shoppers.

Last year, hybrid vehicle sales were up 73%, though they have fallen 5% through August, but the slip can be blamed on supply constraints at Toyota, which is the hybrid sales leader. The company reports that hybrids, including plug-in vehicles, were about 20% of U.S. sales in September, but has said that rate could have been double if not for supply constraints.

“There are a lot of people who will leap into an EV, and there are others who will prefer a hybrid, especially depending on what part of the country you live in,” said Randy Parker, Hyundai Motor America chief executive, told the Journal.

Toyota has been vocal about consumers’ switch to driving electric vehicles. According to Toyota CEO Akio Toyoda, EVs “are just going to take longer than the media would like us to believe,” he said in a recent interview. The CEO said the company will offer the “widest possible” of powertrains to propel cars cleanly. “That’s our strategy and we’re sticking to it,” he said.

Still, Toyota is investing in an EV future. The company will spend 4 trillion yen, or $28 billion, to roll out 30 EVs by 2030. Ford, in comparison, is investing $50 billion in its EV initiatives.

“Our investments may appear smaller than others’, but when you look at what Toyota has been doing over the last 20 years, the total amount might not necessarily be small,” Toyoda said.

A recent NACS survey found that while higher prices have led them to reconsider everyday household purchases, higher gasoline prices haven’t translated into greater interest in electric vehicles. Of drivers who say they intend to buy or lease a new car within the next two years, only one in three (36%) would consider purchasing an EV, with convenience a concern.

“EVs are undoubtably an important part of our future, but there is debate about the timeline for adoption. Today’s drivers of gasoline-powered vehicles express range anxiety because of uncertainty around charging infrastructure availability. This is a valuable opportunity for retailers and others to address and educate future EV consumers,” said Lenard.

The NACS EV Charging Calculator allows retailers to assess the cost and profitability of offering EV chargers at their sites. The calculator focuses on what retailer utility costs associated with EV recharging are and what the corresponding revenue must be to recover those costs after allowing for potential ancillary in-store visits and purchase profitability.