Back in April 2022, General Motors and Honda announced they would be expanding their already two-year-old partnership to include a number of affordable electric vehicles — primarily smaller crossover SUVS — built on GM’s platform and powered by its Ultium battery pack.

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The $5 billion plan was expected to introduce millions of EVs priced below $30,000 to the North American auto market in 2027, potentially putting a dent in Tesla’s market share. However, after a year of analysis, the companies announced Wednesday that they are scrapping plans to develop affordable EVs together.

Speaking to Bloomberg, Honda CEO Toshihiro Mibe said that although both manufacturers will continue to search for solutions to development issues and pursue affordable EV production separately, the GM-Honda EV project has been canceled.

“After studying this for a year, we decided that this would be difficult as a business, so at the moment, we are ending development of an affordable EV,” said Mibe.

A similar tone was taken by GM spokesperson Sanaz Marbley, who said in an email, “Last year, we began working on an affordable EV program for global markets, which was slated for introduction in 2027,” Marbley said. “After extensive studies and analysis, we have come to a mutual decision to discontinue the program. Each company remains committed to affordability in the EV market.”

However, as The Verge notes, the cancellation comes at a time of concern for the electric vehicle industry. With sticker prices and interest rates still soaring, lighter demand and plummeting profit margins have become major issues for automakers.

Many car companies have responded to market pressures by adjusting EV production and others continue to reduce costs to lure more customers. Industry leader Tesla has repeatedly slashed prices across its model line this year in an effort to shift its inventory and get more EVs on the roads.

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Last week, GM revealed it was delaying production of all-electric trucks at its Orion Assembly facility in Detroit until the end of 2025 to “better manage capital investments.” Ford is temporarily cutting shifts at its factory that builds the F-150 Lightning due to parts shortages.

The GM-Honda plan was originally expected to give Tesla and Byd Co., which is quickly making a name for itself, stiff competition. But Honda and General Motors will continue to work together on other initiatives, including EV battery development and self-driving technology. The 2024 Honda Prologue, the second model to be spawned from the original Honda-General Motors partnership, will be available for buyers to order by the end of the year.

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This article originally appeared on GOBankingRates.com: Honda and General Motors Halt $5B Plans To Develop Affordable Electric Vehicles to Rival Tesla — What Now?