Currently reading: What are the implications of the Sony and Honda partnership?

New strategic joint venture will have both companies contributing their individual areas of expertise to make EVs

Honda has dreamed the impossible dream to agree to do what established car companies have resisted for years: become a contract manufacturer.

The agreement between Honda and Sony to jointly work on a new electric-car brand “aligns the technological assets of both companies”, said Honda, as they work to launch their first car in 2025.

In doing so, the two Japanese brands have made a bold move to marry the skills of a software company with the manufacturing and engineering knowhow of an automotive brand.

The combination is one that is being investigated globally as cars become more defined by their software than hardware, but most notably it’s happening in China. Examples there include Geely’s link-up with technology giant Baidu to create the self-driving Jidu brand, with Geely taking the lead on the engineering and manufacturing sides.

Stellantis’s partnership with Apple iPhone-maker Foxconn to develop digital cockpits and connected services via the new Mobile Drive division is another good example, according to Jonathan Davenport, analyst at consultants Gartner.

“There's this coming together of automotive and consumer electronics and software that consumer electronics brands think they can leverage,” he said.

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Sony first showed its interest in cars back in 2020 at the Consumer Electronics Show in Las Vegas, when it revealed the Vision-S electric saloon. It was that rare thing in the automotive industry: a genuine surprise. It wasn’t so much the smoothly generic design that wowed showgoers but the completeness of the concept.

Sony tried to deflect by saying it was more a showcase of some of its technology, for example cameras, but it was clear the interest was there.

Sony then returned to CES this year with the Vision-S O2 SUV, before Honda and Sony made their joint announcement in early March “to establish a joint venture to engage in the joint development and sales of high value-added battery electric vehicles and commercialise them in conjunction with providing mobility services”.

Sony’s entry into the new software-defined automotive era makes sense. It may not have much of a share in the mobile phone market, but its experience selling PlayStation video-game consoles will have useful carryover, with shared hardware elements like chipsets and digital services, such as downloads and over-the-air software upgrades.

Sony will develop a “mobility platform” for the new car brand.

Sony actually makes PlayStations itself, rather than outsourcing them, but designing and building cars is several orders of magnitude harder.

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“An automotive vehicle with all the associated functional safety and ADAS requirements is complex to create but especially to create at scale,” said Davenport.

We often hold Tesla up as an example of the first-mover responsible for many new car-industry trends, and it definitely has been a leader on the software side. But for tech companies and other automotive newcomers, it has also been a clear example of how not to get into the business.

“[Tesla boss] Elon Musk didn’t think he would need to partner with the Fords of this planet with their supply-chain experience,” said Neil Endley, global director for turnaround services at quality consultantcy Trigo. “He said 'I will go do that myself' and then suffered like hell with lack of product to the plants.”

Tesla’s agonisingly slow production ramp-up is one big mistake made by automotive newbies. Underestimating the cost of engineering is another – one that Dyson suffered just before it abruptly shut down its electric SUV project in 2019. Founder James Dyson said that to sell the EV at a profit, he would have had to charge more than £150,000.

Dyson’s costs spiralled in part because it was focusing on redesigning areas that didn’t really need redesigning. It worked in particular on a new HVAC (heating and ventilation system) and improved seats. “Who does that?” an automotive executive said recently, on condition of anonymity. “No wonder the costs got out of hand.”

Car companies and their suppliers have already mastered this kind of engineering. Where they're struggling to catch up is in software, which is why the partnership between Honda and Sony makes such good sense.

The new company will pool talent from both sides to design and develop the car, while Honda “is expected to be responsible for manufacturing” the new model, the two said in their statement.

This is a big deal. Car companies have long feared being relegated to the status of white-label suppliers in the era of mobility. Without the power of the automotive brand to boost pricing, manufacturing and engineering becomes a low-margin exercise.

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The reason why Apple hasn’t yet announced its ‘Project Titan’ car, analysts believe, is because it hasn’t found a car maker with enough scale prepared to become an Apple supplier. After Hyundai had confirmed in 2020 that it was in talks to build an autonomous car for Apple, local press reported just two months later that the Korean giant had backed out on fears of becoming a mere contract manufacturer.

Honda’s partnership with Sony, however, is more equal, with both sharing in the success of the new brand. This of course creates the problem of what to name it. Either brand name would carry weight, but using either could be seen to elevate the status of that company over the other. A new brand name, on the other hand, would have zero customer recognition.

That’s probably the least of their worries. The important takeaway is that the project represents a win for Sony and a significant shift in thinking for Honda. The company’s star has fallen in Europe, with sales dropping from 313,000 in 2007 to just 68,346 last year, according to figures from European industry association the ACEA. The Sony collaboration could be the perfect next quest to, as the song goes, reach for the unreachable star.

What will the first car look like?

The launch in 2025 of the electric Sonda (or should that be Hony?) is a long way off, but we have early clues as to what the car will look like. The exterior of the Vision-S 01 saloon and Vision-S 02 SUV concepts are svelte, aerodynamic and unmemorable.

The interior of the 02, with its three screens running across the width of the dashboard, is probably more central to its appeal and is a grown-up version of what we see today in the Honda E.

Honda and Sony said their first car will “be centred around safety, entertainment and adaptability”, all of which point to autonomous capability.

Honda is working on an electric platform dubbed e:Architecture, due in the second half of the decade, that could be made to fit the timescale, but it has also teased a range of e:N-badged EVs for China based on a stretched version of the E platform.

The first two are conventional electric versions of ICE cars, but the bolder styling of the e:N Coupé, e:N SUV and e:N GT could point to a less conventional look.

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405line 10 March 2022

I would say to Honda to look at what Sony did with respect to Nintendo and be wary of what you tell them about your business.

wmb 10 March 2022

I know that this is a long way off in the planning and brand/company's development stages, but the question will have to be answered: Will these products: mainstream, premium or true luxury vehicles? Granted, as BEVs they, like Tesla's, they will be expensive but Tesla's aren't luxury vehicles. Add to that, if the the joint owned company does use one or, somehow, both of their names, it will have to start at the bottom in gaining credibility among a sea of other products that have had time prove themselves, as well as live up to whatever place they feel they should hold in the market place! Here is a thought though: What if they named the new joint automaker Acura?! Acura does not exist in Europe and onky has a small foot print in North America, its biggest matket! With a few styling changes, the vehicles could added to Europe little problem and be included in their NA line up as with their other ICE vehicles and the BEV that Honda is contracting from GM. I'm sure their would be issues with Acura going from being a wholly owned product brand of Honda's to being co-owned with Sony, or even if this could work. Yet, at least in NA, thus new company wouldn't be starting from scratch and potential Europe customers would have an idea of where these products sit in the automotive landscspe: An Asian Luxury brand, founded in the US! On second thought, maybe not?

bol 10 March 2022

This illustrates why Tesla was right to push on through the pain of ramping up without a legacy partner. It almost went catastrophically wrong, but they made it. If even Apple doesn't have the balls for it, it's another massive point of difference for Tesla. The learning being, if the OEMs say it can't be done, and your pockets are deep enough, do it. Unless your Dyson and guided purely by arrogance and ego, in which case you die on your arse. 

And so what actually 10 March 2022

Dyson was so condescending to the entire industry. Acting like he could simply breeze in and do it better than everyone else.

You make vacuum cleaners pal!