107 replies to this topic

[FullThrottleF1]

So by 2026 we'll be in a situation similar to the mid 2000s, whereby a majority of teams are either a factory team (Audi, Mercedes) or have partnerships (Honda with AM and Red Bull with Ford), or have some other deep factory ties (Racing Bulls and Haas). What happens when this bubble bursts? We are already seeing rumours that Audi won't even make it to 2026.

I think the first domino to fall will be Alpine, what even are they now? They are promoting a brand that has 1 expensive sports car, with the rest being EV's - these cars aren't even sold in many countries. To top it off, they aren't even going to be running their own engine in 2026, I do see a future where Alpine sells out, possibly to Oakes, with him bringing in his Hitech brand. The purpose of the team just seems completely directionless now.

With the switch to EVs by the end of the decade, will manufacturers see any point to promoting gas powered cars? With Hamilton leaving Mercedes, how long do Mercedes keep going? They seem to be ok the downturn in form, not that they don't have the money and are not complete shareholders.

Thoughts?

[Risil]

I think F1 and the FIA are preparing quite well. The new set of engine regs almost treats the internal combustion engine as a spec component so it should be an easier fit for the automotive marketing depts of the future who only want to market their EV wares. The budget cap and de facto franchise model in F1 also keeps team values healthy and protects F1 from a catastrophic loss of interest from automotive.

 

Alpine probably will go (or rather sell up to somebody else who wants the publicity, the Enstone operation will have value as long as designing, preparing and operating F1 cars is worthwhile) but I think F1 will survive without them.

 

(I don't think the bubble will "inevitably" burst btw, it might just deflate slowly and interest return to F1's "core" car companies where competition is a sturdy part of the branding. I do worry a little bit that the economics and incentives of the budget cap and closed franchise will result in one group of teams who are investing for future performance and another who are there to take the profits and run, but that's not so unusual a place for a racing series to be.)

[Risil]

Now MotoGP I do have moderate worries about

[Gareth]

FWIW I think the budget cap makes this worry a lot smaller than it was before. F1 is no longer a massive loss making venture, recharged to the marketing department of auto-makers. The teams' revenues from prize money and sponsorship broadly allow them to wash their faces.

 

It's why we've had PE firms come in as owners.

 

I think the first domino to fall will be Alpine, what even are they now?

Up for sale, I think. That's what I read into the decision to close the engine side down.

 

And given the above, I expect they will find a buyer.

[FullThrottleF1]

FWIW I think the budget cap makes this worry a lot smaller than it was before. F1 is no longer a massive loss making venture, recharged to the marketing department of auto-makers. The teams' revenues from prize money and sponsorship broadly allow them to wash their faces.

It's why we've had PE firms come in as owners.

Up for sale, I think. That's what I read into the decision to close the engine side down.

And given the above, I expect they will find a buyer.

Hitech is the most likely? Given the attempt at entry in 2023. Plus Oakes is already there...

[Grippy]

I foresee a financial crash in '26* so will be interesting to see what happens with the manufacturer teams, as @Risil says, the budget cap and prize money should keep them profitable, where Liberty will stand I don't know.

 

* not a prophet or clairvoyant but we're living in interestiing times.

[ARTGP]

So by 2026 we'll be in a situation similar to the mid 2000s, whereby a majority of teams are either a factory team (Audi, Mercedes) or have partnerships (Honda with AM and Red Bull with Ford), or have some other deep factory ties (Racing Bulls and Haas). What happens when this bubble bursts? We are already seeing rumours that Audi won't even make it to 2026.

I think the first domino to fall will be Alpine, what even are they now? They are promoting a brand that has 1 expensive sports car, with the rest being EV's - these cars aren't even sold in many countries. To top it off, they aren't even going to be running their own engine in 2026, I do see a future where Alpine sells out, possibly to Oakes, with him bringing in his Hitech brand. The purpose of the team just seems completely directionless now.

Budget cap made the teams are profitable. I don't understand the origins of your hypothesis.
 

With the switch to EVs by the end of the decade,

lol. If we just invent imaginary scenarios then of course we can speculate on many imaginary outcomes...



There may be a bubble that burst, but it is not from the manufacturer side. It is from the tracks, sponsors, and tv deals. That is what is propping up all of the profitability that trickles down to the teams and FOM.

Edited by ARTGP, 04 December 2024 - 15:42.

[FullThrottleF1]

Budget cap made the teams are profitable. I don't understand the origins of your hypothesis.


lol.

Sorry but as one petrolhead to another. The EV change is inevitable

[KWSN - DSM]

Some manufacturers will get it wrong, their boards will stop being interested in their name being associated with continued failure, they will change name to something not seen as 'them', then drop their own engine development and become a buyer, followed by selling out to Qatar, Saudi Arabia or other countries sports washing themselves into a perceived level of acceptance.

[FullThrottleF1]

Some manufacturers will get it wrong, their boards will stop being interested in their name being associated with continued failure, they will change name to something not seen as 'them', then drop their own engine development and become a buyer, followed by selling out to Qatar, Saudi Arabia or other countries sports washing themselves into a perceived level of acceptance.

Audi is already halfway there 😂 I'm not completely convinced there will be an Audi branded team on the grid come 2026

[aportinga]

Cosworth/Ilmor and others step in and provide power with Manufactures "branding".

 

Obviously that's a lot less money on the grid.

 

Or 

 

F1 gets bought out by a Middle East consortium and... fill in the blanks

[FullThrottleF1]

Cosworth/Ilmor and others step in and provide power with Manufactures "branding".

Obviously that's a lot less money on the grid.

Or

F1 gets bought out by a Middle East consortium and... fill in the blanks

I don't think Liberty is interested in selling - they've had a good ROI since they bought it

[ARTGP]

Sorry but as one petrolhead to another. The EV change is inevitable

 

I am not saying that because I am a "petrolhead". I am saying it because it is what the manufacturers are saying. 

 

AUDI/VAG has just committed to new regulations beginning in 2026

Honda has just recommitted to new regulations beginning in 2026

Toyota will not be an "EV" manufacturer in 2030.

GM has commited to a petrol engine in 2028. 

 

I think you're about 5 years too early and by the time that manufacturers are only making EVs, F1s own regulations would have changed to suit the interest of the manufacturers but that is a long way away (2035).  The manufacturers are not under threat of walking away because F1 and the FIA build the regulations to suit the prevailing interest of the manufacturers for the time period during which those regulations are in force, just as in 2014. 

Edited by ARTGP, 04 December 2024 - 15:56.

[Sterzo]

As far as I'm aware, teams these days are not dependent on manufacturer subsidies, therefore there is no bubble waiting to burst. Manufacturers currently supply engines, but that's easily remedied with a cheaper spec power train, whether internal combustion, hybrid or electric.

[Anderis]

I don't think much is going to happen. Luckily a good foundation has been put in place, so if the manufacturer bubble bursts, the manufacturers will just sell the teams to someone else. Look at how much anti-dilution fee Andretti was willing to pay to be accepted as the 11th team- this is not late 2000's/early 2010's anymore, you can easily make a team profitable, or at least self-sustaining these days.
So at worst, just a few teams are going to change their names and there may be a fewer PU suppliers and maybe they'll lower the budget cap a bit (if it's combined with a broader financial crisis) but that's about it. A standard PU in an extreme case maybe but I don't think it'll get this far.

Edited by Anderis, 04 December 2024 - 16:03.

[Clatter]

No way can you compare the present situation to pre-budget cap times. No manufacturer, or any team, is going to simply close the doors and walk away. The budget cap, and all teams getting a share of the money, rather than just the top 10, means all teams can pay their way. Worse case scenario is that some teams will be sold.

[KWSN - DSM]

Audi is already halfway there I'm not completely convinced there will be an Audi branded team on the grid come 2026

 

Brand will be there, how much is actually Audi seems to becoming a question.

[aportinga]

I don't think Liberty is interested in selling - they've had a good ROI since they bought it

 

Well based on the authors scenario, I'm not so sure the ROI would be so great. Better to sell while in the black than in the red. Although they may not matter at all to the folks in the Middle East as long as they can sports-wash via F1.

[highdownforce]

Now MotoGP I do have moderate worries about

If KTM indeed "go burst", MotoGP already has a problem.

[Risil]

I think MotoGP can get along without KTM but my worry for the medium term is that another Japanese manufacturer does a Suzuki and Ducati experience a serious downturn in sales. Don't know if these are on the cards but the world is changing fast.

[RainyAfterlifeDaylight]

Finally Spec F1!

Edited by RainyAfterlifeDaylight, 04 December 2024 - 16:53.

[JRodrigues]

Brand will be there, how much is actually Audi seems to becoming a question.

 

It will definitely be more than Mercedes. Or Alpine. Or Ford. Or even McLaren. So.....

[JHSingo]

I do understand the concern about F1 seemingly only being interested to allow manufacturers in the sport these days, but I do think it's less of a risk now than it used to be. 

 

What with the value of teams, combined with the budget cap, I can't foresee a sudden mass exodus like we had from 2008-2009. I think what is more likely is something like we've already seen with Audi already, manufacturers selling a stake of the team to investors meaning that they can reduce the amount they need to spend to compete, while still retaining a place in the sport with all the benefits that brings. 

It is concerning times generally for the automotive sector, given the difficulty that many are having at selling electric cars. Given the worrying signs coming out of VW, Nissan and Stellantis to name just three, it's likely we'll see some brands dying out completely - and/or motorsport programmes being greatly scaled back. 

 

I think we're likely to see a shift as this decade progresses where privateer racing teams start to be more valued by racing series again. 

[CoolBreeze]

So by 2026 we'll be in a situation similar to the mid 2000s, whereby a majority of teams are either a factory team (Audi, Mercedes) or have partnerships (Honda with AM and Red Bull with Ford), or have some other deep factory ties (Racing Bulls and Haas). What happens when this bubble bursts? We are already seeing rumours that Audi won't even make it to 2026.

I think the first domino to fall will be Alpine, what even are they now? They are promoting a brand that has 1 expensive sports car, with the rest being EV's - these cars aren't even sold in many countries. To top it off, they aren't even going to be running their own engine in 2026, I do see a future where Alpine sells out, possibly to Oakes, with him bringing in his Hitech brand. The purpose of the team just seems completely directionless now.

With the switch to EVs by the end of the decade, will manufacturers see any point to promoting gas powered cars? With Hamilton leaving Mercedes, how long do Mercedes keep going? They seem to be ok the downturn in form, not that they don't have the money and are not complete shareholders.

Thoughts?

 

There is no such thing. EV craps are not doing well at all, its a false dawn about the death of ICE.
 

[JRodrigues]

 

It is concerning times generally for the automotive sector, given the difficulty that many are having at selling electric cars. Given the worrying signs coming out of VW, Nissan and Stellantis to name just three, it's likely we'll see some brands dying out completely - and/or motorsport programmes being greatly scaled back. 

 

Bmw.. Volvo.. MERCEDES!!!

[KWSN - DSM]

It will definitely be more than Mercedes. Or Alpine. Or Ford. Or even McLaren. So.....

 

Yes, and if the Mercedes on the grid had been performing as the Alpine on the grid, the Mercedes board would have pulled out as the team name, they may keep owning their percentage, but they would not allow their name to become F1 mediocrity. 

[DeKnyff]

It already burst after 2009, when BMW, Toyota and Honda quit. Then, 2010 was one of the best Championships of the last decades. F1 can survive without manufacturers.

[Nathan]

When it bursts that's when you blow the dust off the privateer applications and start negotiating $1 deals to transfer ownership.

[LolaB0860]

It'll burst in WEC way sooner than in F1

[KWSN - DSM]

It already burst after 2009, when BMW, Toyota and Honda quit. Then, 2010 was one of the best Championships of the last decades. F1 can survive without manufacturers.

 

Better than with them.

[FullThrottleF1]

There is no such thing. EV craps are not doing well at all, its a false dawn about the death of ICE.

The UK is having a full ban on new petrol cars in 2030.

[Red5ive]

I am not sure this "switch to EV's by the end of the decade" will actually happen.

 

There are signs reality is finally beginning to creep back in - infrastructure not there nor likely to be without mega levels of investment in everything from charging points to the power grid itself. Cars to expensive. Range and associated inconvienience still a major issue. EV sales still nowhere near target etc etc 

 

At the very least current deadlines will be pushed - probably substantially. 

 

Maybe even at some point "they" will realise we have backed the wrong horse and alternative fuels etc were the way to go after all.

Edited by Red5ive, 04 December 2024 - 18:16.

[Clatter]

The UK is having a full ban on new petrol cars in 2030.

ICE isn't banned until 2035,but it needs to be hybrid after 2030. That does assume there won't be a change in policy.

[pdac]

So by 2026 we'll be in a situation similar to the mid 2000s, whereby a majority of teams are either a factory team (Audi, Mercedes) or have partnerships (Honda with AM and Red Bull with Ford), or have some other deep factory ties (Racing Bulls and Haas). What happens when this bubble bursts? We are already seeing rumours that Audi won't even make it to 2026.

I think the first domino to fall will be Alpine, what even are they now? They are promoting a brand that has 1 expensive sports car, with the rest being EV's - these cars aren't even sold in many countries. To top it off, they aren't even going to be running their own engine in 2026, I do see a future where Alpine sells out, possibly to Oakes, with him bringing in his Hitech brand. The purpose of the team just seems completely directionless now.

With the switch to EVs by the end of the decade, will manufacturers see any point to promoting gas powered cars? With Hamilton leaving Mercedes, how long do Mercedes keep going? They seem to be ok the downturn in form, not that they don't have the money and are not complete shareholders.

Thoughts?

 

F1 PUs have little relevance to most road cars, so I don't see the difference between road cars being electric or fossil with regard to whether F1 is the place to market them. The marketing aspect is about manufacturers getting their name out there, not about the kind of things they are doing for F1.

[FullThrottleF1]

ICE isn't banned until 2035,but it needs to be hybrid after 2030. That does assume there won't be a change in policy.

Latest reports still sat 2030

[pdac]

ICE isn't banned until 2035,but it needs to be hybrid after 2030. That does assume there won't be a change in policy.

 

With my cynics hat on, it's telling that the deadline date is beyond the lifetime of any governments that are currently in power. It's easy for governments to stick with policies that they will not be required to implement. Let's see what the ground looks like in 2029, then 2034.

[Risil]

It already burst after 2009, when BMW, Toyota and Honda quit. Then, 2010 was one of the best Championships of the last decades. F1 can survive without manufacturers.

The continuing support of Mercedes, Ferrari and Renault was pretty vital, you have to admit

[noikeee]

I agree with the general sentiment that F1 is in a much better place to deal with a 2008-style crisis than it was back in 2008. The obvious thing is the budget cap which means teams are spending a fraction of what they used to, and are no longer pushing each other to a death spiral of spending which also introduced uncertainty and volatility. But the flip side is also good which is income, for 3 reasons, 1) F1 is now much more popular worldwide which means it became a much better billboard for sponsors, attracting money to F1 in the process; 2) it's finally broken through the US market which is huge; and 3) the sheer number of competitive sessions has ballooned, which financially also means more money coming in. Plus there are new rule safeguards in place to try to prevent teams from totally dominating and ruining the show (ex the wind tunnel hours handicaps), it remains to be seen whether it'll work as intended from the new rulechanges in 2026 onwards, but in theory things should remain interesting which is good for the numbers of TV eyeballs.

 

Ultimately what all of this means is, even if we have a global major economical recession with 4 manufactures ****ing off almost simultaneously as we did then with Toyota, Honda, BMW and Renault; there should be no shortages of private investors rubbing their hands trying to buy F1 teams on the cheap, even if the recession is serious and fewer investors can get their hands into cash and credit. F1 teams appear nowadays to potentially actually be profitable instead of the massive money sinks they used to be. Plus, if you can make serious money flipping houses, buying them low and selling high, imagine how much profit you could earn if you apply that same concept to F1 teams. In this scenario we could literally have all the manufacturers go away, that someone out there would still buy the teams out, plaster some other company names in the cars and go racing.

 

The one iffy scenario is if public opinion turns violently against F1 and against cars in general, let's imagine climate change gets worse and worse and worse and the public wakes up to it and F1 starts being seen as an obscene waste of fuel and waste of travel miles round the globe, and there are protests and people stop watching etc. It could very well happen as the climate crisis already feels very, very real, but we're not quite there for this to happen specifically against F1 any soon IMO.

Edited by noikeee, 04 December 2024 - 18:57.

[pdac]

Latest reports still sat 2030

 

Well, I don't know about other territories, but in the UK the government preparation for this date seems to be to fine manufacturers for not selling enough EV's and telling private companies to step up and install more charging points - without paying out money or even relaxing planning rules.

[SenorSjon]

Well, I don't know about other territories, but in the UK the government preparation for this date seems to be to fine manufacturers for not selling enough EV's and telling private companies to step up and install more charging points - without paying out money or even relaxing planning rules.

 

Second hand car dealer could be a very profitable profession soon, even Bernie is selling cars now.

 

In 5 years and 1 month, there is no way it will be EV-only at new car dealers. They would go extinct very quickly following the green madness.

[Nathan]

That does assume there won't be a change in policy.

 

Voters will not accept an EV only new car world within 10 years. On top of hearing Gen Y/Z cry 'I can't afford a house' you are going to add 'I can't afford a car now either'? These 2030/2035 numbers were short term politicians offering long-term vision.  Godspeed to governments that actively take on the task of reducing the perceived standard of living for the middle class.

[Clatter]

Voters will not accept an EV only new car world within 10 years. On top of hearing Gen Y/Z cry 'I can't afford a house' you are going to add 'I can't afford a car now either'? These 2030/2035 numbers were short term politicians offering long-term vision. Godspeed to governments that actively take on the task of reducing the perceived standard of living for the middle class.

Voters may well not be given that choice, at least not at the ballot box.

Edited by Clatter, 04 December 2024 - 19:56.

[FullThrottleF1]

Second hand car dealer could be a very profitable profession soon, even Bernie is selling cars now.

In 5 years and 1 month, there is no way it will be EV-only at new car dealers. They would go extinct very quickly following the green madness.

No new cars are being launched as petrol or diesel. Bar the small volume manufacturers. EV is the future. Most new cars I see these days are EVs

[KWSN - DSM]

No new cars are being launched as petrol or diesel. Bar the small volume manufacturers. EV is the future. Most new cars I see these days are EVs

 

Should be hybrids, the actual sensible choice - Electric for daily commute, electric and fossil when going longer distances - As tech improve, hybrids will get more and more efficient on the Electrical side, infrastructure will evolve until no longer an issue, and EV cars have an actual 1-to-1 with fossil cars.

[FullThrottleF1]

Should be hybrids, the actual sensible choice - Electric for daily commute, electric and fossil when going longer distances - As tech improve, hybrids will get more and more efficient on the Electrical side, infrastructure will evolve until no longer an issue, and EV cars have an actual 1-to-1 with fossil cars.

I'm not saying what is the better option, I'm just saying what I see in my area

[Nathan]

Do you think auto makers will eventually relegate themselves to normal sponsors who just look to put stickers on the car and host events in order to align a brand and grab attention? Basically nix the technical involvement.

 

I wonder when European governments start telling F1 "we don't need the noise and image."

 

Will F1 buying FormulaE be the next regulator shatstorm? FE has the FIA WC exclusivity for EVs.

 

 

Voters may well not be given that choice, at least not at the ballot box.

 

IMO it's nature that will have to do it, but the easily riled sure as hell won't be told by another person in a higher station and/or class.

Edited by Nathan, 04 December 2024 - 21:15.

[loki]

Sorry but as one petrolhead to another. The EV change is inevitable

No it’s not.  You’ll not find a bigger EV proponent than I.  At this point it looks to be a combination.  Synthetic fuels, some sorts of plug in hybrids and traditional hybrids plus full EVs.  Ships, planes, long haul trucking, freight trains and heavy equipment will run on fossil fuel in the meantime if not in perpetuity.  

 

There is not a charging infrastructure in most parts of the world.  We’re well ahead of the curve here but it’s till not enough.  Nothing has been done in the way of multi dwelling access to charging.  In urban areas those housing types many times don’t have any sort of parking.

 

The battery supply chain is not ready.  It’s going to take at least another 5 years for that to catch up.  Pricing is still prohibitive in the mid range and lower end of the market.  Replacement battery costs are off the hook.  Buy a $30k Leaf drive it for 5-6 years until the pack winds down then it’s $10-15k plus labor to replace it with a 3rd party refurb pack.  I’ve been looking at salvaged Leafs to convert a classic Mustang to EV.  A Leaf with a dead pack is between $1k and 2k US.  It would still cost me another few grand to do the cell swap in the pack as I have the space tools and knowledge.  Most don’t.  The little woman thinks we should do that but not as a conversion just yet so we have an older Leaf with a refurb pack for an around town car for around $5k in parts.  I’m not paying $30-40k for a lower end EV with a basic trim level and limited range.  It’s not worth it.  Many others feel the same way.

[loki]

Voters may well not be given that choice, at least not at the ballot box.

The market will decide.

[DeKnyff]

The continuing support of Mercedes, Ferrari and Renault was pretty vital, you have to admit

 

Mercedes and Renault I admit, but I don't think we can consider Ferrari as a manufacturer. I'm not falling into the myth of "selling road cars to finance sport activities", but you can't deny they have a different relationship with F1 than the rest of manufacturers.

[pdac]

Voters may well not be given that choice, at least not at the ballot box.

 

Be in no doubt, if there's a big cache of voters to be had, all political parties are going to try to woo them with whatever promises they think will do it.