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Audi & BMW’s Withdrawal From Formula E Presents a New Electric Future

Car manufacturers depart from Formula E due to corporate misalignment and supply chain issues, could this signal a foreshadowing of an electric future?

Jul 11, 2022 | By Jeremy Yip
Image: FIA Formula E

More emphasis will be put on ensuring the environment is not compromised when racing events are held from 2026 onwards as the Fédération Internationale de l’Automobile (FIA) has set out new regulations to govern competing teams’ commitment to sustainability. The key objectives that FIA set on the list include: using 100 per cent sustainable fuel, overall efficiency and a new focus on electrical power.

For Formula E races, these impending changes are no stranger as its founding mission is to accelerate the transition to zero emissions mobility by testing out new technologies on the race track before rolling it out to the public. Furthermore, Formula E partners with the United Nations Environment Programme to spotlight the benefits of the global shift to e-mobility.

Of course, the goal is to transfer what has been learned from these electric races to commercial car models but reality often falls short of expectations. With the global supply chain facing a crunch time, it has resulted in widespread disruptions and shortages of materials, which puts a shadow on the move towards electrification. Additionally, the withdrawal of Audi and BMW from Formula E is also a major blow for the sport as these giants are suppliers of engines and power units to other teams and series.

Could this spell the end of Formula E and is this signalling a foreshadowing of electric motoring’s future — be it on the tarmac or commercial usage?

Image: Formula E

To meet FIA’s requisites for 2026, new engine development needs to be done. Apart from electrifying the powertrain to a greater extent, the motor has to be compatible with synthetic fuels among other provisions for the race car. For any car manufacturer to be among the front runners, a tough decision has to be made and the pulling out of prominent players tells of its determination to remain a leading voice in the arena.

Naturally, it is easy to fault the exit of major car manufacturers from Formula E on the Covid pandemic. But neither Audi nor BMW have directly cited that as the reason for its departure, instead these companies revealed that Formula E no longer aligned with its corporate objectives. The increased demand for adhering to the new standards presents an additional obstacle that needs to be overcome and this effort could be utilised more efficiently on innovations that could benefit the company’s main product offering. Thus, with car manufacturers leaving or switching over to Formula 1, it is vying for a headstart in the upcoming races.

For manufacturers like BMW and Audi, there was perhaps too much of a disparity between the technology produced for Formula E and the technology produced for its standard electric vehicles. Parts and materials to produce the batteries such as lithium, nickel and graphite are already facing supply shortages. This has been ongoing since the start of 2021, therefore increasing overall material cost. As such, carmakers are finding it extremely difficult to even fulfil orders from retail customers and “auxiliary projects”, like race cars, have taken the backseat.

Image: Audi

Perhaps entering Formula 1, the most intense competition in the automotive world, is the catalyst for a brighter future. The four main factors: environmental, financials, global awareness and technology, these will be the guiding principles for carmakers despite the ever-shifting market demands.

In announcing the three-pointed star carmaker’s withdrawal from Formula E last year, Marcus Schaefer, who is Mercedes’ board member for research and development said, “Formula E has been a good driver for proving our expertise and establishing our Mercedes EQ brand. In the future, we will keep pushing technological progress — especially on the electric drive side, focusing on Formula 1.”

Amidst the multiple teams’ pullout of Formula E, Audi and Porsche’s interests in Formula 1 are high, and the brands are having thoughts of a partnership with other racing teams such as Red Bull Racing and Mclaren. Car manufacturers moving to Formula 1 may be seen as a natural step, where the battery and material crisis pushes for greater innovation while learnings from coming races could be applied to retail product offerings.

Image: Formula Rapida

The implications are obvious and introduce a neat twist. While Formula E loses a few manufacturers due to its restrictive technologies and battery options, Alfa Romeo, Alpine and Mercedes have reaffirmed its commitments to Formula 1. As part of the corporate business plans to go all-electric, these car manufacturers firmly believe that Formula 1’s push for hybrid tech plays a pivotal role in accelerating battery development for the new age, thus serving hybrids and electric vehicles globally and also commercially.

Image: Spies Hecker

Manufacturers’ departure from Formula E does not necessarily put a bad light on the specific race series but proves to be the right time for a positive prospect in motorsports development. It eventually helps to open the way for an environmentally-conscious and electrical future.

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