Manufacturer Teams are Tiring out of Formula E

Formula E is still a young motorsports series with only 6 seasons logged into the record books. Yet, in that short history, the series has attracted an impressive amount of works teams. Major automotive manufacturers in Audi, BMW, Jaguar, and Nissan have lined the city center grids in previous seasons. Mercedes and Porsche entered as new additions to the series just last season. Formula E as a single seater, electric powertrain motorsport championship, the concept of FIA president Jean Todt, presented itself as great opportunity to manufacturers.

Brands like Tesla had proved at the consumer level that all-electric vehicles were viable and had significant demand from early adopters. Undoubtedly, electric vehicles will play significant role in future of mobility as consumer adopt in mass, whether through regulation or pure consumer demand, as internal combustion engines fade into the background.  While Tesla has its challenges as an all EV automaker, the brand is way ahead of other automakers in terms of technology development and in market recognition. A lot of major automakers have had to seriously catch up, and quick.


This is where Formula E enters. Manufacturers can use the motorsport series as a platform to research, engineer, develop, and test electric powertrain technologies. Teams would be set up with the ultimate goal of transferring the technology development and research into road going production models. A major advantage of funneling the R&D through a motorsport series is the opportunity to offset costs. For many automakers, the cost of researching and investing in EV technology has been the primary factor in their slow adaptation.  Most free cash flow of these businesses go towards their existing internal combustion engine production models and development. Participating in Formula E, however, allows manufacturers to use the series prize money and sponsorship revenue to greatly offset these costs, providing some freedom from the company’s bottom line.

Participating in Formula E also provides another major advantage in market recognition. If surveying consumers as to which brands they recognize most for electric vehicles, most of the brands listed here earlier were not likely at the top of those results. At least not a couple of years ago. In its 5th season, Formula E visited 12 countries with each race occurring on city centric street circuits. The 12 countries included some of the biggest automotive markets in the world such as China, the United States, Germany and France. Each of these races provides a stage for the automakers on the grid to display their competency in electric powertrains and build brand EV recognition to markets of current and future consumers. It makes sense so many automakers joined the series.


However, in December of 2020, Formula E was dealt a blow as two of its longest standing manufacturers announced they were leaving the series after the upcoming season; BMW and Audi. Participation in the series had hit a point of diminishing return for the manufacturers. BMW lauded the successful transfer of technology from its racing participation to production cars, including advancement in energy management and software. However, BMW also lamented that they have now tired out the opportunities to continue to transfer technologies “in the competitive environment Formula E.” BMW Group will now instead focus on global production output of electric vehicles as it steps away from the series. It is not confirmed if their racing partner, Andretti Motorsport, will also leave.

Audi Sport ABT Schaeffler (Image Copyright: Audi)

Audi had announced it was leaving Formula E as a factory outfit only a week earlier than BMW. Similarly, the series had hit its ceiling for the German automaker. After 5 years of development, the Audi e-tron SUV has successfully made its way to major markets, delivering nearly 2,000 units in the United States in the third quarter of 2020. The e-tron GT will bring a performance 4-door coupe variant to showrooms soon. What was the future of electric vehicles a couple years ago is now the present. The automaker has also credited its participation in Formula E as a major contributor to the EV transformation at the brand. Now, Audi has announced it will turn its factory focus to their innovative, all-electric Dakar Rally entry for 2022. Markus Duesmann, CEO of Audi, describes the move as:

…taking the next step in electrified motorsport by facing the most extreme conditions. The many technical freedoms offered by the Dakar Rally provide a perfect test laboratory for us in this respect.


The statement is can be viewed as pretty damning to the relevancy of Formula E. Two manufacturers have come out, in a roundabout PR way, to say there is no upside to participating in the series given that mass consumer adoption of EV is now here and that the technical restraints of the series isn’t supportive of making significant technology development anymore. Manufacturers are looking elsewhere. Audi has confirmed it will also return to endurance racing in the upcoming LMDh category. The spec hybrid category was jointly created by IMSA and the ACO, to allow entries to compete in both the IMSA WeatherTech SportsCar Championship and the FIA World Endurance Championship. Highlights of each series respectively include the 24 Hours of Daytona and the 24 Hours of LeMans. LMDh teams will partner with one of four available chassis suppliers, bring their own bodywork and engine, and pair it with a spec hybrid system that will reduce costs on the electrification of the powertrain. All now with the opportunity to bring the car around the world.

It creates a platform where you can have the same car racing worldwide. The U.S as we know, as a huge market, it’s a big market for it. It’s a big market for pretty much all the car manufacturers.

Allan McNish, Audi Formula E Team Principal

While new entries Mercedes and Porsche have voiced their commitment to the series, they have both called out for Formula E to evaluate its financial structure to help keep team operating costs sustainable and evaluate the potential of the series. A similar path to what Formula 1’s new Concorde Agreement is aiming to do in making teams profitable franchises. Prior to the COVID-19 altered season, Formula E had been regularly increasing its revenue, viewership, and social media footprint. However, the series has a long way to go in improving the entertainment value of its events, which are often described boring, to see substantial growth. Current viewership alone isn’t nearly large enough for manufacturers to view participation as primarily a brand marketing exercise.

Porsche LMDh Prototype (Image Copyright: Porsche)

In a couple of years, Formula E will be competing against new hybrid categories in IMSA and WEC, along with a variety of new electric off road competitions, for the attention of automotive factory teams. Porsche has also committed to the LMDh category which starts racing in 2023. How long would they compete in Formula E and LMDh simultaneously for? How long before Nissan is tempted to go the same path as Audi? Unfortunately, manufacturer works teams always come and go but Formula E has some critical evaluation to do, and they will have to do it promptly, to keep the series growing.

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