Sony and Honda's Afeela EV Is So Expensive, It Needs a 10-Year Lease Contract

In January, Sony offered more details about its EV developed in partnership with Honda. One overlooked detail was about the Afeela sales model. Sony admits the price would be too high to be paid upfront, and a 5 to 10-year lease contract would be needed. This presents new challenges in itself.
Sony and Honda’s Afeela EV is so expensive that it needs a 10-year lease contract 7 photos
Photo: Sony
Afeela EV introduced at CES 2023Afeela EV introduced at CES 2023Afeela EV introduced at CES 2023Afeela EV introduced at CES 2023Afeela EV introduced at CES 2023Afeela EV introduced at CES 2023
With cars becoming more like computers on wheels than vehicles with a brain, it was only a matter of time before IT and electronics companies wanted to enter the fray. And enter they did, pledging billions to develop smart electric vehicles with the goal of making them drive autonomously at some point in the future. We’re not talking about Apple, which may or may not be developing their own car.

But what is so enticing that almost all technology companies want to make cars? We’re pretty sure it’s not the oily bits, otherwise, we would’ve seen a Sony-branded vehicle long ago. It’s the software that attracts the IT and electronics companies like a moth to a flame. More specifically, self-driving software. There’s a common belief that the autonomous-driving sector might be worth trillions. And this segment could be a boon to any software-centric company, which explains why electronics companies are keen to take a swing at it.

Sony wants a piece of the EV pie

Sony took everyone by surprise in January 2020 when it unveiled the VISION-S EV prototype during CES. The concept was very mature, sporting an enticing design and cutting-edge technology. Since then, Sony has habitually updated the world with the car’s development with every CES edition. In 2022, Sony displayed the VISION-S 02 prototype, a crossover that could compete with the Tesla Model Y and the Ford Mustang Mach-E. For the first time, Sony admitted it wanted to enter the automotive business.

Afeela EV introduced at CES 2023
Photo: Sony Media
In March 2022, Sony announced that it was partnering with Honda to further develop its car project, which must’ve been a mistake, in my opinion. Honda is a reputable car manufacturer, but has almost zero experience developing and producing electric vehicles. If anyone badly needed this partnership, it was Honda rather than Sony.

The relationship between the two companies was made clear during this year’s CES because the electronics company had the upper hand and handled all communications. If anything, the Afeela concept presented was a step back compared to the previous Vision prototypes, and some might even call it an uglier Honda Civic. It also marked the transition from the Magna platform to Honda’s e:Architecture.

I won't be delving into Afeela’s characteristics since we've done that already. There’s one little detail that prompted me to write this piece, and this is the new sales model that Sony and Honda have imagined for the new brand. Specifically, Sony has claimed it sees a long car ownership cycle for the Afeela, which might need an equally long lease contract. Although this was spun as a subscription contract, it’s nothing but.

Companies love subscription plans

Subscriptions are becoming more popular with companies because they allow an uninterrupted revenue stream with little effort. When it’s done right, otherwise, you end up being mocked, as happened to BMW or Toyota. Subscriptions are normally used for software features that require server-side operability. Nevertheless, the same model is growing with car manufacturers, some offering their vehicles on pay-as-you-go subscription plans.

Afeela EV introduced at CES 2023
Photo: Car and Driver
It’s something that Volvo’s sister company Link&Co pioneered and is now becoming more popular with other car companies. One characteristic is that the plans are usually very flexible, with contracts for as little as one month. You can switch cars based on your needs and pay for what you use, or you can just return the vehicle and be done with it. When this flexibility is missing, we’re talking about a normal lease contract. From this point of view, Afeela will lease its cars, not offer them on a subscription, as others and Sony have said.

What is highly unusual with Afeela is the long lease plans that Tesla wants its clients to commit to: up to ten years. This is woefully long for a car you might hate a few years later. The industry is changing fast, and new features are added all the time. Why would anyone get stuck with a decade-old car? Especially when they pay the same amount others pay for a new car. This is something Sony and Honda still need to figure out.

Afeela is too pricy for its own good

They admit that the car is too pricey for an upfront payment. Sony knows nobody wants to buy a dud for a lot of money, but a monthly payment might be more palatable. Sony and Honda assure us that the technology inside the car is well worth the steep price, with tremendous computing power and the promise of Level 3 and Level 4 autonomous driving.

Afeela EV introduced at CES 2023
Photo: Sony Media
“Replacing the car every three to five years is a very traditional methodology,” said Sony Honda Mobility Chairman and CEO Yasuhide Mizuno at CES. “But now, big change. This car is always updating; therefore, we try to utilize customers over five to 10 years.”

Afeela is not the only company that thinks cars should offer a longer life cycle than they offer today. Peugeot detailed similar plans in its medium-term strategy. The French carmaker wants its vehicles to stay relevant for 20 to 25 years, although they do not expect customers to pay that long for ownership. They instead offer to refurbish the cars with every new owner, making them like new again. As for the money problem, Peugeot does offer pay-as-you-go subscription plans. Unlike Afeela’s 10-year commitment, Peugeot customers will be able to upgrade their cars or return them whenever they wish.

I’m not sure whether Sony Honda Mobility will get to manufacture the Afeela EV at all. But I’m almost certain very few people would sign a ten-year contract for a car they don’t know. Especially when competing products are better-looking, more technologically advanced, and with more flexible purchasing options. What do you think, would you pay ten years to drive a car like the one in the pictures?
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About the author: Cristian Agatie
Cristian Agatie profile photo

After his childhood dream of becoming a "tractor operator" didn't pan out, Cristian turned to journalism, first in print and later moving to online media. His top interests are electric vehicles and new energy solutions.
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