Sony Honda Mobility pulled the plug on an electric-vehicle joint venture after nearly four years of work toward the new brand.

Afeela, which drew the ire of franchised auto dealers in California, where it was slated to start delivery of its first model this year, fell victim to scaled-back EV plans as Honda follows other automakers in a retreat.

The state’s dealer trade group sued the venture and American Honda last August, accusing it of violating California franchise laws and demanding it stop its direct-to-consumer sales and marketing.

In a joint statement, Honda and Sony Group gave no indication that the challenge had anything to do with the decision, instead pointing to the automaker’s reassessment of its electrification strategy, including canceling plans to launch three electric models that would’ve been produced in North America.

The partners, in announcing the cancellation of the first and second Afeela models, didn’t snuff out all possibility of working on a similar project in the future.

“Sony, Honda and [Sony Honda Mobility] will continue to discuss and evaluate the future of SHM, taking into account the initial purpose of the JV establishment as well as the latest EV market environment, and intend to jointly announce SHM’s future direction, mid to long-term positioning as well as contributions to the future of mobility at the earliest possible opportunity.”

EVs have taken hits lately as the federal government under the Trump administration has pulled back incentives and other support for adoption while demand hasn’t kept pace with expectations in Europe. Automakers have scaled back previously ambitious plans to go all electric by the 2030s.

Meanwhile, global EV market leader China continues to make inroads in Europe and most recently in Canada, which has eased tariffs on imported Chinese EVs.

In another disputed case of direct-to-consumer auto sales, the California New Car Dealers Association, along with Florida Audi and Volkswagen dealers, is pursuing a lawsuit against Scout Motors, accusing Volkswagen of illegally competing with its dealers with direct-to-consumer Scout EV sales. Volkswagen, for its part, has described Scout as an independent sister company.

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