Adds context, analyst quotes in paragraphs 2-8, 10

By Daniel Leussink and Kantaro Komiya

TOKYO, March 25 (Reuters) - Sony Honda Mobility, the joint venture between Japanese electronics giant Sony and automaker Honda, said on Wednesday it would halt development of its Afeela electric vehicles after Honda joined rivals in scaling back its EV ambitions.

Honda 7267.T said earlier this month it would take a writedown of as much as 2.5 trillion yen ($15.7 billion) as it trims its EV plans, pushing the company to its first annual loss in almost 70 years as a listed firm.

Under President Donald Trump, the U.S. has rolled back support for EVs, while demand in Europe has been weaker than expected. That has forced automakers such as Ford F.N and Stellantis STLAM.MI to book large writedowns of their own.

For Sony 6758.T, scrapping Afeela makes it the latest legacy technology company to abandon an EV project, highlighting how tough it is for new entrants to break into a market dominated by Tesla TSLA.O and fast-moving Chinese rivals.

Apple AAPL.O shelved its decade-long EV effort more than two years ago, while Chinese smartphone maker Xiaomi 1810.HK has bucked the trend with its SU7 sedan, launched after more than a decade focused on consumer electronics.

NO PATH TO MARKET

Sony Honda Mobility said Honda's decision left the JV without a viable path to bring Afeela models to market, as it could no longer use technologies and assets expected from Japan's second-biggest automaker.

The venture said it will issue full refunds to customers in California who had reserved the Afeela 1, its planned first model, and would continue discussions with Sony and Honda on next steps.

Deliveries in California had been expected to begin late this year, with a second model based on a newer prototype targeted as early as 2028. Orders for the Afeela 1 opened last year, with prices starting at $89,900.

Travis Lundy of Quiddity Advisors said shortly before the announcement that the Afeela was "doomed to fail", calling it a "weird vanity project" unlikely to become central to Honda's future.

In a filing, Honda said the impact on its updated full-year consolidated financial forecasts for the fiscal year ending this month would be immaterial.

Sony also said it did not expect the discontinuation to have a material effect on its financial position.

Sony Honda Mobility was created to pair Honda's engineering and manufacturing with Sony's software and gaming capabilities to catch up with EV rivals.

($1 = 158.8700 yen)

(Reporting by Daniel Leussink, Sam Nussey and Kantaro Komiya. Editing by Thomas Derpinghaus and Mark Potter)

((kantaro.komiya@thomsonreuters.com; X: @kantarokomiya;))