It is an essential truth of Formula 1 that mainstream car manufacturers, the most endemic of all brands in the sport, will come and go when it suits them or as market forces dictate.
In the good times, the opportunities to promote their brands and technological development have led as many as seven different manufacturers to compete for the world championship. But when three withdraw at once, as happened with Honda, Toyota and BMW in the financial crisis of 2008-09, panic sets in.
Since 2020, F1 has boomed, with more than 800mn fans worldwide. F1 data shows that 30 per cent of them have been following the sport for fewer than four years and 40 per cent are women. This large, affluent audience has attracted more than 300 sponsor brands for the first time. The fastest growth is among younger and female fans, many attracted by the Netflix series Formula 1: Drive to Survive.
And yet F1 remains wary of relying on manufacturers’ support. The internal combustion engine (ICE), the core of the F1 power train, faces legislative headwinds globally. Sensing a threat, in 2022 the Fédération International de l’Automobile (FIA), F1’s governing body, announced new engine regulations for 2026, to reduce costs and attract new manufacturers to the sport.
“Even though the current engine was very efficient, some people were beginning to feel they were not as relevant,” says Nikolas Tombazis, single-seater director at the FIA. “We also faced an existential problem. Honda had just announced they were pulling out [again] and there were doubts about whether Renault Alpine would stay in the long run. So we could end up with just Mercedes and Ferrari supplying [engines to] five teams each. We didn’t think that would be healthy.”
“Major manufacturers are essential,” adds F1 chief executive Stefano Domenicali. “But we know if a major crisis hits, the . . . big automotive groups make tough decisions. That’s why we must simplify and reduce costs, while maintaining road-relevant technologies, like sustainable fuels, which complement EV [electric vehicle] offerings.”
The goal of the 2026 F1 regulations is to make F1 more sustainable and efficient, by using a greater proportion of electrification in the power train while mandating 100 per cent sustainable fuels for the first time. “The fuel must come from sustainable sources, whether that’s biofuel or synthetic fuel or a mixture — so looking at the carbon content, no dinosaurs have been hurt in the making of the fuel,” says Hywel Thomas, managing director of Mercedes-Benz AMG High Performance Powertrains.
Power from electrification has been raised from 120KW to 350KW, while that from the ICE is down from 560KW to 400KW, with double the amount of energy regenerated from braking.
Audi committed and acquired a team. Honda was tempted back as an engine supplier after its initial plan to withdraw. Ford agreed a badging partnership with Red Bull Powertrains, which will supply engines to Red Bull’s two teams. General Motors will enter next year with a team under the Cadillac brand and plans to build an engine from the 2029 season. Until then it will use Ferrari power units. Renault Alpine opted to retain its F1 team, but to buy in engines.
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What won over the mainstream manufacturers was the opportunity to develop ultra-efficient hybrid engine technology for road use, with cost caps introduced on team running costs and engine development, while benefiting from F1’s marketing power.
“The Audi F1 project has been subject to a budget limit from the outset. This enables long-term planning security, economic stability, and a reduction in the costs necessary to be competitive,” says Jürgen Rittersberger, a member of the management board at the German carmaker. “For Audi, these sustainable financial conditions were an important criterion for entering Formula 1.
“At the same time, the revenue side of Formula 1 has developed very positively because the popularity has increased significantly. It is increasingly reaching young target groups. This trend is of great importance to Audi, as it affects our core markets [of] North America, Europe and China,” he adds. “In addition to the money from TV and marketing rights distributed to the teams based on their results, sponsorship is the most important source of income for the team. And for us as a company, the value of the team is relevant — this is likely to increase further in the future.” F1 team valuations are now well over £1bn and rising amid F1’s boom.
Audi was a pioneer in hybrid racing technology with its success in the Le Mans 24 Hours in the 2000s. Next year will be its first appearance in F1. Audi acquired the Sauber team from Tetra Laval co-owner Finn Rausing, which will officially be rebadged as Audi.
Mercedes has been a stalwart of F1 since 1993, its own team winning successive titles between 2014 and 2020. Last year McLaren won the constructors’ title using a customer Mercedes engine. Next season the three-pointed star will supply three customer teams.
On the marketing level, Mercedes entered F1 to lower the average age of Mercedes customers. Its experience over the past two decades also demonstrates to Audi and other newcomers the potential value of technology transfer from the F1 track to road cars. Adam Allsopp, director of advanced technology at Mercedes AMG HPP, highlights some examples. “Electrically assisted boosting [from current F1 powertrains] has been introduced into AMG products, enabling driveability by essentially eliminating turbo lag,” he says.
Learning from the optimised cooling design of the F1 battery also led to the development of AMG’s direct-cooled battery, used in performance road cars.
“Of course, in both the combustion engine and electrical side, we are developing low-volume, highly bespoke product for a niche application, so not necessarily directly applicable to road cars, but when I look back to some of the emerging technologies we loaded into the 2014 power unit, many that seemed exotic and radical at the time are now in everyday use in the EVs that we drive. That’s a trend I expect to see extended with this [2026] regulation set.”
So will the F1 bet for newcomers Audi, Ford and Cadillac pay off? It is another essential truth of the sport that only one team at a time can win. In this most competitive of environments, sometimes manufacturers leave simply because they cannot keep up.
