Track shipments

The real Formula 1 race will take place off track

The 25-year term of this exclusive license means the company Agag founded, Formula E, can exclude Formula 1 from electric vehicle racing until at least 2038.

Only 13% of cars sold worldwide in 2038 will be powered by internal combustion engines, if projections by British consultancy Rho Motion prove correct, meaning Formula 1 is likely to be tied to technology endangered.

Of all the dubious legacies left by former Formula 1 owner Bernie Ecclestone, his failure to identify, capture and own the disruptive threat posed by electric vehicle racing may prove to be the most serious.

No such risk was taken by the world’s elite motorcycle racing championship, MotoGP, which managed to defuse the disruptive threat by creating its own clean-energy racing league, MotoE.

“We have taken a direction that in the automotive industry was initially not seen as the right one,” Formula 1 chief executive Stefano Domenicali said in a speech at the SportNXT conference in Melbourne this week. . “But now he’s getting stronger.”

Domenicali was talking about Formula 1’s sustainability program, which started with small steps in 2014 when rule changes introduced hybrid engines. Limits were placed on the amount of gasoline the engines could consume, and alternative energy sources were found by recovering heat and harvesting the kinetic energy created when a driver applies the brakes.

It’s no coincidence that the changes were introduced in the same year that Formula E kicked off its inaugural 10-race season across nine nations.

Last year, four-time Formula 1 world champion Sebastian Vettel lamented the lack of “relevance” of current hybrid engines for ordinary road cars, and warned that Formula 1 would die out if it did not introduce sustainability measures that had a greater connection. to road cars.

The sustainability agenda has accelerated since ownership of Formula 1 passed to New York-listed Liberty Media in 2017. The sport has pledged to be net-zero emissions by 2030, and the rule changes this year require cars to use fuel that contains at least 10% ethanol; a fuel made from plant materials that can have a lower carbon footprint than traditional fuels if made in a certain way. By 2026, Formula 1 will go further, promising to be powered entirely by “advanced sustainable fuels”.

Just as the Australian government’s net zero commitment for 2050 is based on the hope that yet-to-be-discovered technologies will emerge and save the day, Formula 1 does not yet have a clear picture of what its sustainable fuels will look like. Shell supplies fuel to Ferrari’s Formula 1 team, and the oil giant’s motorsport delivery manager, Dr Valeria Loreti, said developing a new sustainable fuel for 2026 was a “big challenge ” but also a “great opportunity”.

“I don’t think it will be 100% ethanol; it’s probably not good enough for those types of cars,” she said. FRG weekend. “It could be synthetic fuels, it could be biofuels, and the end goal is really a low-emission fuel.

“It can be a small stepping stone because obviously it’s not going to change the whole show. But it’s very visible, it’s a big message.

Even though EVs will dominate new car sales in 2038, Rho Motion expects EVs to still only make up “about one-third” of the global car fleet by then. In this context, Domenicali argues that reducing the carbon footprint of remaining internal combustion engines is a laudable goal, even if it is not a zero-emissions solution.

“There’s a lot of pressure on full electrification. We’re not denying that, there’s no doubt about it. But we think full electrification isn’t the one-size-fits-all answer to the need to have sustainability at the center of our industry,” he said at the SportNXT conference.

“We will allow manufacturers to be in the market with the normal fuel that you can have at all service stations to ensure that all products will be fully sustainable.

“That’s why we get a lot of attention from new manufacturers who want to be part of our world.”

“Noble ambition”

Loreti says Shell sees business and environmental sense in reducing emissions from internal combustion engines while they’re on the road. “For now, even assuming everyone switches to battery electric, there will still be a very large fleet [fleet] that is, internal combustion engines, and for those customers, Shell is really committed to continuing to offer biofuels or alternative fuels to help reduce carbon dioxide emissions,” she said. declared.

Formula E’s Jamie Reigle applauds Formula 1’s “lofty ambition” to have sustainable fuels by 2026 but says it will not slow the global transition to electric vehicles.

“I suspect there are people who drive vintage Maseratis who will say [sustainable fuel] it’s great because when it gets really hard to stop for gas in 2035, my car will be able to fill up and drive,” he says.

“But if you talk to any car manufacturer in the world, nobody thinks that if they [Formula 1] do that, then electricity won’t exist and we’ll all be pumping sustainable fuel at gas stations around the world.

“I think Formula 1 survives and thrives because of what it has as a sport, not because it talks about [sustainable] fuels. They talk about [sustainable] fuels as a way to ensure they can still win sponsors who have to prove their budget and ask “What’s your sustainability strategy?”

Sponsorship generated 16% of the $2.13 billion ($2.84 billion) in revenue generated by Formula 1 in 2021, with media rights providing 40% as fans embraced arguably the most entertaining season in sports history, when Dutch driver Max Verstappen snatched the title from Lewis Hamilton in controversial circumstances on the final lap of the final race of the season.

Formula E is much more about branding; it relied on sponsorship for around 57% of the €175 million ($255 million) in revenue generated from its seventh season in 2021.

While generating barely a tenth of Formula 1’s revenue, Formula E grew rapidly in the years leading up to the pandemic that complicated the sport’s affairs; from 19.7 million euros in 2015, turnover rose to 161.5 million euros in 2019.

The electric vehicle trend may be his friend, but Reigle knows his sport needs to be more than a novelty that offers big corporations an environmentally friendly branding opportunity.

“Our challenge now is whether we can build a proper sport where people talk about it with their friends at work or in the pub arguing over who the best Formula E driver is,” he says.

“It’s not because people [will] driving electric cars doesn’t mean Formula E is doomed to success.

Growing pains

Formula E has had its own growing pains; Audi and BMW left the sport in 2021, while Mercedes signaled it would not return in 2023 when a rule change will force manufacturers to invest in new car design.

Reigle says the exit of these top teams was influenced by Formula E racing rules, which were previously designed to deliver unpredictable results at a time when Lewis Hamilton’s dominance of Formula 1 was being blamed for killing the sport.

While the unpredictable results are theoretically fun for the public, they’re less appealing to manufacturers who want their motorsport investment to deliver the kind of consistent success that sells cars.

Reigle has responded by changing the way drivers qualify for starting positions on the Formula E racing grid in a bid to make sporting competition more “credible” and where the top performing team normally wins.

“As long as we have those attributes of a good sport and it’s financially viable, more teams should come in,” he says.

Shell has embraced Formula E as a means of creating a niche in a segment of vehicles that will not need Shell fuels. Shell has partnered with Nissan’s Formula E team to develop and supply the transmission greases and fluids needed for electric racing.

While Formula 1 will race at Melbourne’s Albert Park this weekend, Formula E will race in Rome. Formula E does not have an Australian race, but Reigle says he would like to hold a race here one day.

Australian links to sport are growing; Iron ore miner Fortescue Metals Group recently acquired the engineering company which is the exclusive supplier of batteries for Formula E cars.

Australia’s status as a major exporter of battery minerals such as lithium creates a powerful brand narrative for the sport, even though the adoption of electric vehicles here is slow by global standards.

Agag said last year that the sensible solution would be to merge Formula 1’s proud history and huge fan base with Formula E’s stranglehold on the technology of the future.

Both sports are owned by different companies with similar names and some common history. Liberty Media, owner of Formula 1, is legally separate from the European telecommunications company that owns Formula E, Liberty Global. But the two companies have a common background and both count American media mogul John Malone as chairman. Malone has a stake in both companies, but not a majority stake.

Although Reigle believes Formula E influences Formula 1’s sustainability efforts, he does not see the world’s most popular motorsport championship as its main rival. He also doesn’t feel the pressure to plan for Formula 1’s demise by 2038, when Formula E’s exclusive license expires.

“Formula 1 is the pinnacle of motorsport, everyone understands that it goes back in history [famous drivers like] Fangio, Clark, Senna and Prost. No one can take that away from them,” Reigle says. “They will survive in the long run because they have a huge fan base.”

Reigle believes around 25% of Formula 1 fans also follow Formula E, although research by his organization suggests that a significant proportion of the world’s 800 million motorsport fans have never heard of it. Formula E.

“They literally don’t know we exist. It gives me hope; there are people who like motor racing and they don’t really know us,” he says.

“You can have a scenario where we are hugely successful…and yet Formula 1 is still very successful.

“It’s not a zero-sum game, they can feed each other.”