The entity to be formed by the Tokyo-based companies aims to design, develop and sell EVs, but will not own manufacturing plants, Honda said on its website.
Instead, Honda would be responsible for manufacturing the first EV model at its own vehicle manufacturing plant, while Sony will develop a mobility service platform and make it available for the new company.
Sales of the company's first EV model are expected to start in 2025.
"The new company will aim to stand at the forefront of innovation, evolution and expansion of mobility around the world, by taking a broad and ambitious approach to creating value that exceeds the expectations and imagination of customers," said Toshihiro Mibe, chief executive of Honda Motor.
Global sales of electric vehicles more than doubled to 6.6 million in 2021, as more people opted for eco-friendly alternatives to traditional fuel guzzlers, the International Energy Agency said last month.
The worldwide EV market currently enjoys a market share of 9 per cent in the overall car industry, more than double the 4.1 per cent in 2020, when three million units were sold, and more than triple 2019's 2.5 per cent share, when 2.2 million cars were sold, the IEA said.
EV shipments are expected to rise by almost 35 per cent on an annual basis in 2022, as governments introduce regulations and incentives to help the industry's growth, research firm Gartner said last month.
The increase in EV demand is also expected to cause a surge in global battery demand, which is projected to reach nine terawatt hours annually by 2030, 15 times the levels recorded in 2020, said a report from Oslo-based Rystad Energy this week.
Car manufacturers have also constantly upped their strategies to cater to growing EV demand. Toyota has committed 8 trillion yen ($69 billion) on electrification through 2030 and expects to sell about 3.5 million battery EVs worldwide by then, representing about a third of the world's biggest carmaker's annual sales. In December, it also announced plans to build a $1.29bn EV battery plant in North Carolina.
Germany's Volkswagen, Europe's biggest car manufacturer, predicts half its cars will be battery EVs by 2030. Ford Motors, the second-biggest in the US, last month announced a major reorganisation that calls for boosting EV spending by as much as $20bn, using the success of industry pioneer Tesla as a road map.
Tesla, the world's biggest EV manufacturer, delivered 308,600 cars in the fourth quarter of 2021, bringing its full-year total to an all-time high of 936,172, up 87.4 per cent year-on-year – a victory lap for the car maker since it had already smashed its single-year record in the previous three-month period.
The Honda-Sony partnership will bring together Honda's mobility development capabilities, vehicle body manufacturing technology and after-sales service management experience with Sony's expertise in the development and application of imaging, sensing, telecommunication, network and entertainment technologies, the companies said.
"Through this alliance with Honda, we intend to build on our vision to ‘make the mobility space an emotional one', and contribute to the evolution of mobility centered around safety, entertainment and adaptability," said Kenichiro Yoshida, chief executive of Sony Group.
The two companies said they expect to sign various binding agreements, including a joint-development pact and a joint venture deal, with a goal of establishing the new company this year, subject to regulatory approvals.