Why F1 shouldn’t go down the independent engine manufacturer route

2020 F1 season

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After Honda announced the 2021 F1 season will be its last in the sport, paddock focus switched to the question of potential replacement engine supplier(s) for both Red Bull teams.

Where will they turn? Under F1’s regulations Renault, as the only current supplier without customers from next year, will be obliged to supply both teams if called upon to do so. But the French company and its former partner have a mercurial history, so there is an obvious reluctance to reconcile unless absolutely necessary.

That means Red Bull and AlphaTauri face four realistic options: the Renault route; persuade Ferrari or Mercedes to go beyond the call of duty and supply them; encourage another manufacturer to enter at short notice; or, canvas Honda to cede the rights to its engines to another party. This could be F1 itself, which would lease the rights to an independent company, or grant them to Red Bull to sub-contract supply and development.

Whatever solution is ultimately settled upon – and must be a resolution – does not alter the fact that F1 is desperately short of engine suppliers. It therefore faces a decision of its own: Continue appeasing manufacturer factions or introduce cheaper, ‘dumbed-down’ engines to be supplied by independent companies.

Jim Clark, Lotus, Zandvoort, 1967
Ford financed Cosworth’s successful DFV engine
With sustainability being top of every motor manufacturer’s agenda, road relevant, low- (or zero-) carbon technologies are crucial. The problem is that they are also horrendously expensive and horrifically complex – which is in turn reflected in their costs.

Companies House records reflect that in 2018, the latest reporting period, Mercedes High Performance Powertrains Limited – effectively the team’s F1 engine division – employed 700 heads, of which 100 filled administrative roles. The wage bill totalled almost £50 million, equalling an average annual salary of £70,000.

True, HPP (formerly Ilmor) undertakes projects on behalf of the wider Daimler family; equally, headcounts are unlikely to have decreased much in two years particularly given that Mercedes has since entered Formula E. If two-thirds of non-administrative staff are deployed on the F1 project, the bottom line is 400 direct heads and a wage bill of £28m (€31m). These figures are in line with paddock estimates.

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Consider that FIA regulations stipulate engine supply pricing for two-car teams, namely “€15 million (unless agreed otherwise between the power unit manufacturer and the new customer team)” for a quantity of internal combustion power units sufficient for a season plus 5,000km testing, all hybrid components including energy store, plus spare parts packages and trackside support.

Cosworth’s last F1 stint was unsuccessful
Given that independent engine suppliers are unlikely to service more than two teams – three maximum – F1 engine income would be €45m per year at best. However, such engines need to be on par with ‘works’ power units, leaving little room for costs savings. Thus 400 heads (at €32m) are required to provide a competitive alternative. Add in costs of (exotic) materials and hi-tech facilities, and red ink flows. In short: unviable.

Misty-eyed fans – and even some F1 chiefs – lament the passing of independent engine suppliers, citing Cosworth, Hart, Judd and Ilmor, who offered power for hire. Indeed, for a decade Cosworth dominated F1. There are no doubts that without such independents various teams including Mercedes (whose roots lie in Tyrrell) Red Bull (Stewart/Jaguar), McLaren, Williams and Sauber would have disappeared.

However, sweep aside nostalgia and the reality is that Cosworth was F1’s only successful independent and then only because seed funding was provided by Ford. When Renault arrived with its big-bucks turbo engines in 1977 the writing was on the wall. By 1982 turbo power had delivered its first championship, for Ferrari, and the following year the Cosworth DFV took its final victory.

True, the brand won again, but as a Ford subsidiary. Ilmor made its mark only after being acquired by Mercedes. Judd, Hart and others have all disappeared and Cosworth’s last (low budget) fling from 2010-13 saw nothing like the success of previous incarnations.

During his Friday media briefing McLaren team boss Andreas Seidl, who has worked for independent F1 teams and manufacturer outfits within both F1 and WEC, called for F1 to consider a return to independent engine suppliers. “In the end, you have two possible directions,” he said. “One is obviously to keep trying to have power units in Formula 1 which are leading on technology, and [provide] a platform to develop future road car technology also.

“Or you go in another direction, which means you simply go for power units that are a lot less complex and also a lot cheaper.”

The problem is that less complex, cheaper and potentially dirtier engines are unlikely to appease manufacturers. More so if they are dumbed down sufficiently for cash-strapped independents to compete on equal terms. Imagine no-brand units beating Mercedes or Ferrari to titles. When manufacturers exit they create collateral damage by closing shop and taking their marketing dollars and support with them. BMW, Toyota and Honda provide proof of this, while Renault has also yo-yoed in and out.

The big risk is that F1 rewrites its regulations to make then independent-friendly but in the process alienates its current manufacturer base, who exit – only for F1 to discover it has not attracted sufficient independents to plug the gaps, all while being saddled with ‘dirty’ regulations which make it impossible to retain or attract sponsors. Plus, manufacturers would take their transmissions with them.

Daniel Ricciardo, Renault, Sochi Autodrom, 2020
Manufacturers are distancing their volume brands from F1
Already F1’s only volume manufacturer team owners, namely Mercedes and Renault, are distancing their mainstream products from F1 – the former indirectly by placing more marketing emphasis on its AMG sub-brand; the latter by rebranding its team to Alpine. So imagine the confusion were their road cars powered by more sophisticated engines than those found in their branded F1 cars. Exits would be the next step.

Like it or not, F1 has no choice but to stick largely to its current engines. Continuity provides stability and reduces costs, in turn making F1 attractive to further brands, while revamps should be aimed at freezing complexity while boosting sustainability. Despite the increasing popularity of electric vehicles, there are still over a billion internal combustion engines roaming the planet’s roads, and these would benefit from zero or low-carbon fuels.

The problem facing F1 is not so much one of engine supply as one of relationships: Renault provides perfectly good power units reckoned by most to be on a par with Honda and ahead of Ferrari. Yet, for historic reasons, the Red Bull teams wish to look elsewhere. Does this mean F1 suddenly has a power unit crisis? As analysed here this week, Honda’s exit was not unexpected, and is unrelated to the current formula.

These factors are no reason to change an entire formula, one that to date delivered the most efficient internal combustion engines ever and, crucially, is largely paid for. What F1 needs to do now is concentrate on sustainability and the rest will follow. However this is no small task, and the clock is ticking.

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Dieter Rencken
Dieter Rencken has held full FIA Formula 1 media accreditation since 2000, during which period he has reported from over 300 grands prix, plus...

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  • 42 comments on “Why F1 shouldn’t go down the independent engine manufacturer route”

    1. How about a compromise where F1 uses a massively simplified Hybrid engine? 1.5 litre petrol engine (as today) + a very powerful Electric engine. No Heat recovery, Kinetic recovery etc. Could even replicate what happens in road cars by having eg petrol on rear wheels, electric on front. Part of the race (first 5 laps?) could even be run on electric only. Dump all the complex stuff but make it the simplest possible Hybrid.

      Ideally this engine format needs to be used in GP2 (with smaller battery pack or some other way of lowering power), LMP2/similar etc too to make it more viable for a manufacturer.

      1. This. Or some version of this. Maybe the ICU can only be used to charge batteries? Or reduce the amount of petrol by 25% each season (and unlimit the electric side). Keep it clear, and simple.

      2. No heat or kinetic recovery? Where does the charge come from then?

        This post typifies the muddled thinking around F1 engines. However simple you make them, the best engine maker will make the best one – even a V8 with no variable valve timing, a rev limit, weight limit, CoG limit, bore and stroke limit…

        You can dumb it down for ever, all you’ll achieve is dumb.

      3. Ultimately, while it might be less o a no starter for all manufacturers (including Ferrari) than going full “legacy” NA, non hybrid engines would be Depailler, @rsp123, in the mid term (5 years or so) it would turn out using engines that are just about on par (if not already behind) with what is in the actual modern cars too.

    2. Isn’t Mercedes AMG High Performance Powertrains Ltd Ilmor?
      And didn’t all Mercedes engines that Mclaren used to drive with come from Mercedes Ilmor?

      So imagine the confusion were their road cars powered by more sophisticated engines than those found in their branded F1 cars.

      Who would be confused? The F1 fans? The teams? The manufacturers? Or the customers that lease a car for 2 years, and spend an extra 100 per month for a aesthetic “performance package”?

      Continuity provides stability and reduces costs, in turn making F1 attractive to further brands,

      Very few F1 fans want to watch another 7 years of Mercedes dominance, and in the past 7 years stable engine regulations and reliability demands haven’t made the development of engines or the running of succesful F1 teams any cheaper, nor has it converged the field.

      Very few new sponsors step into this situation as well.

      there are still over a billion internal combustion engines roaming the planet’s roads, and these would benefit from zero or low-carbon fuels.

      There are also a billion hungry mouths to feed that could be fed on the starch and sugars that biofuel is made off, and another billion are knocking on the door the coming decade.

      And then on top of that there is the fact that Grand Prix has become the Petit Prix, because there is a media company or mogul that takes 90% of the F1 profit creating a sport/show that can’t be run sustainably by a race team without another company backing it.

      F1’s current situation seems to be doomed if it does, and doomed if it doesn’t.

    3. Biskit Boy (@sean-p-newmanlive-co-uk)
      11th October 2020, 10:50

      I think this article is a better argument for independent engine suppliers than against. Its clear where the problems lie. Cost and politics. I believe F1 just needs an engine which is fit for purpose. Its a political choice to go the hybrid route, not a sporting one. The carbon produced by traditional ICE F1 engines is a tiny fraction of F1s entire carbon footprint. The current engines are just a symbolic gesture in that direction. Until F1 can go 100% electric its just too expensive to get there gradually.
      As for the politics, or as the article says, relationships, this illustrates perfectly why independent engine suppliers providing a unbiased, retail, customer service has enormous benefits. Providing examples where this has failed in the past is not a good argument against. If the regulations were framed to support it, it would work.
      Time for the Rule makers to think again.

      1. Before you can decide which engine spec if fit for purpose, you need to decide what that purpose actually is. A lower cost, simpler engine would suit the sport and may encourage independent suppliers, but as the article points out that will not match the marketing or development purpose of the likes of Honda. And therein lies the rub, you can have successful independents or manufacturers, but you can’t please both at the same time.

        1. It is not just automotive marketing which relies on F1 being increasingly ‘green’. It is a prerequisite ever more to show a brand is ecologically sound in practice and philosophy. Much of it is bull, of course, and the CEOs are probaably still flying around in executive jets but the ‘greenery’ is very powerful and can’t be ignored.

          I can see the day when a track has to refuse to continue holding F1 races because the promoters or local authorities have succumbed to pressure from that ‘green’ lobby. Look at all the advertising on cars and race suits, the hospitality spend, the TV rights…. all are susceptible to the same pressure.

          “Why are you supporting a sport which is destroying the planet”?

          Without sponsorship and advertising F1 can’t exist in anything but a hay bale road racing series on the fringes.

          1. Biskit Boy (@sean-p-newmanlive-co-uk)
            11th October 2020, 12:29

            In the long term the infrastructure that moves the F1 circus around the world will be carbon neutral.

        2. Biskit Boy (@sean-p-newmanlive-co-uk)
          11th October 2020, 12:32

          isn’t the purpose of a racing car engine to race? Any other requirement is negotiable

          1. Hydrogen will be powering ICE F1 will still have a Power Unit with pistons and an F1 sound. AT least that is what is in development. Hydrogen fueling an ICE. If it can be made safe to use, road cars will be using the tech. Tesla is working on alternative engines other than EV. They have a battery that does not use lithium; another environmental problem. where do old batteries go? To the dump.

      2. José Lopes da Silva
        11th October 2020, 16:13

        When you say “politics” I guess you think of it as something that you can overcome through sheer will.
        By “politics” you mean “free markets”.
        Consumers demanding green solutions from the manufacturers; Voters demanding green solutions from politics. As we all know, democracies were conceived the same way as free markets in the Enlighthenment era.

        If you ignore the free markets, where does this all lead?

        1. Biskit Boy (@sean-p-newmanlive-co-uk)
          11th October 2020, 19:32

          No. I mean politics. Policy decisions driven by personal preferences. Forget voters demanding green solutions from Manufacturers. That need not have anything to do with F1 rules. In fact, using your logic, why not substitute ‘voters’ for ‘viewers’? Make rules to please the viewers. That’s what F1 needs to do. Get it?

          1. Jose Lopes da Silva
            12th October 2020, 9:06

            I understand.
            But you can’t dissociate the voters and the viewers that easily. Not many years ago, this was a mass entertainment. If you dissociate, it will become a niche entertainment, even faster.
            But well, maybe we can live with it. Horse riding, golf and snooker live fine that way.

      1. Biskit Boy (@sean-p-newmanlive-co-uk)
        11th October 2020, 12:21

        This article on batteries id an old pile of pants.
        Tesla new batteries don’t have cobalt. EVs are way cleaner than ICE in everyday. Anyone who argues the opposite had their head in the sand.

    4. Let us not forget that the whole car industry is missing electrification. Tesla is years ahead of old car manufacturers who will suffer much in the comingi 5-10 years. ICE car sales will drop and e-car manufacturing for them is still loss-making business because of bad optimization and high cost of batteries they have to buy in from 3rd parties. Motorsport will change a lot because of this – Toyota, Honda, Mercedes and many other big companies just don’t have the cash to throw into motorsport.

      1. They really aren’t. A lot of car manufacturers like Nissan, Renault and Hyundai have better electric engines than Tesla. And their car parts don’t fall off after being bought either, so there’s that.

        Although yes, F1 is probably in a tight spot.

      2. @f1lauri your comment about the “high cost of batteries they have to buy in from 3rd parties” applies to Tesla though, because they rely on Panasonic to manufacture a large proportion of their batteries – as recently as June this year, Tesla signed a new three year contract with Panasonic for them to manufacture batteries.

        https://uk.reuters.com/article/uk-tesla-panasonic/tesla-signs-three-year-pricing-deal-with-battery-cell-maker-panasonic-idUKKBN23N3I7

        1. Biskit Boy (@sean-p-newmanlive-co-uk)
          11th October 2020, 12:26

          The crossover point when EVs become cheaper to buy than ICE cars is expected to be around 2025. They are already way cheaper to run and much cleaner too.

      3. Or hydrofication. Fuel cell tech is getting cheaper by the week allmost. F1 as first racing class to enforce hydro cars

        1. Fuel cell development is a long way away. Cartage is a problem. Liquid Hydrogen dangerous. But I feel it will happen. F1 cars must have ICE to sound like an F1 car, not a Slot Car.

    5. “So imagine the confusion were their road cars powered by more sophisticated engines than those found in their branded F1 cars. Exits would be the next step.” Would it? From what I read and hear among people I know, car enthusiasts still want ICE’s in their performance cars. The noise is one of the main selling points. Take a drive out in UK any day the first thing any car enthusiast seems to do is make their car loud as possible. I also fall into the supposed progressive bracket (early 20’s) who are supposed to be the ones wanting this green stuff.

      1. Biskit Boy (@sean-p-newmanlive-co-uk)
        11th October 2020, 12:36

        Last time I checked my road car doesnt have active suspension, ground effect or six wheels. Proof F1 doesn’t need to have the latest technology. Plus road relevance doesn’t help overtaking.

    6. Perfectly summed up

    7. Honda has left – is this because the wrong type of technologies are being pushed forward?
      Or is it cost? I’m guessing the indy car engines they have committed to are far simpler.

      I’d also imagine Mercedes dominance in F1 and regulations that are quite restrictive and make it hard to make gains and catch up once committed to idea that may have limiting factors on performance – you cannot do a u-turn.

      The regs need to be more relaxed and allow for different types of engine and recovery systems. Limits on cost, energy use permitted, amount energy produced by the hybrid (the quest would be how easily can you make the power and quickly) – might open up a whole new thing and ideas – as it is the rules are so restrictive – whh does it need to stipulate the v angle/how big/ how many cylinders/type of recovery? Etc etc.

      1. Racing Dave, there is a conflict between what might be cheap for the engine manufacturer and what is best for the chassis manufacturer – the interoperability of those engines and the simpler installation from having the standardised layouts helps them make changes from one engine supplier to another more easily.

    8. My honest opinion… Toss the FIA regulations and let the teams choose their own engines, aero and tire choices… F1 is dying a slow painful death. – Love 1972

    9. Yes, let’s keep the costs as high as possible and the technology as complex as possible. After all, the FIA doesn’t really need to know how it all works. That’s none of their business anyway.
      Who needs independent teams anyway?! I’m so glad the Williams family has left F1. And hopefully McLaren will sell their team to a big manufacturer.
      Who needs those when you have satellite teams linked to big manufacturers (Alfa Romeo, RP/Aston Martin).
      These hybrid engines are the best thing to ever happen to F1. Just look at how many new manufacturers have joined the sport since 2014. Tons. Global players like Honda etc.
      Manufacturers need to be able to control their customers, otherwise they might beat them. That’s not what racing is about.

    10. Yawn. The same old dumbing down debate.

      F1 needs to keep it’s eyes focussed on leeading the field by having the most advanced high performance car engines. The ICE is holding this back. We went through the same steps when the turbos came in – it needs to agree alternative engine strategies. At the time it ended up being 3L normally aspirated and 1.5L turbo as a way of supporting both. It’s clear F1 and FE being separate is the cause of the political hoops otherwise we’d simply see options for electrically powered f1 cars alongside the hybrids and, possibly, alongside other engine types such as hydrogen.

      The reality is the existing manufacturers will try to keep it stable so that they win, however, supporting alternatives gives a route in for new manufacturers with new greener technologies – if they can be made to perform.

    11. I think Dieter has got it spot on. F1 needs the manufacturers invloved and they want road car relevant technology. Yes I know the V12s/V10s and even the V8s all sounded better but if we had stayed with them, F1 would have already dwindled to an obscure series.

    12. Mark in Florida
      11th October 2020, 14:48

      F1 has a choice, stay with the current state of things and be like the little Dutch boy with his finger in the dike hoping that the money leaking out doesn’t exceed the money coming in. If they stay with the big team format they will always be at their mercy when it comes to the regs. If Liberty went with the small teams and independent power plant builders or at least a much simplified engine format from Ferrari, Ilmor or WEC engine builders out there take your pick there’s plenty. Liberty might lose the big manufacturer teams except for Ferrari and Renault but Liberty could bring in more independent teams due to lowered costs. Look how competitive the midfield is right now! If we could see this kind of action up front every race you wouldn’t have a problem with getting sponsorships everyone loves a winner especially if it changes every now and then. My guess on this would be that Liberty will stick with the current model and let it swirl the drain like the black hole that it is until it plunges into the singularity.

    13. There is a level of sunk cost fallacy at play here. Despite the current engine formula having failed at every way possible the insanely high costs have allowed the manufacturers to make fia think it is too expensive to move to different engine formula because the current engines are so expensive. Add the high running costs due to the engines being so fully prepared for each track, heavy weight and power delivery causing issues for pirelli, lack of competition on track, mercedes total domination 8 years in a row, 2 division formula, non-factory teams locked into losing… the list of problems introduced since 2014 is insane.

      But there are no other options.

      In the end the f1 engine has nothing to do with technology. F1 needs manufactrurers because they pour money into f1 which in turn guarantees that f1 is the most highest grade level of motorsports. With simpler engines that concept is much harder to sell. And manufacturers are in f1 to elevate the status of their brand. Not to use it as an engine lab (adorable idea). The engines just need to sound complex so the average person thinks “cool” when they hear it has this and that and does this and that.

      All that being said (and I’d love to see a proper v12 racing engine sold by independent engine makers in modern f1 car) sadly I think the overpriced hybrids is the only way forward for f1. It is the only option that ticks the boxes that matter. In short money and glamour. It keeps the only three brands interested in f1 (that are interested in being in f1) by giving them a advertizing platform. It keeps f1 costs in check because these manufacturers pour insane sums into f1. And it gives f1 stability. And it makes f1 look technically advanced.

      Even with the sunk cost fallacy of having expensive engines because the other option is even more expensive is somewhat dumb… having these engines is probably the only solution going forward. F1 needs its money pouring manufacturers more than ever before. Any new manufacturer friendly engine proposition is too expensive even for the big car makers. Any smaller simpler cheaper engine will mean the manufacturers just leave and without those pr millions it is a lot harder to sell the new engine formula. And fully electric is not possible yet. F1 has cornered itself into corner with this engine formula and there is simply no way out but to keep doing the same thing and just hope for the best.

    14. Hydrogen. I don’t care how the engine would sound. It is technology that needs to be (and will be) developed and who better to lead the way than F1.

    15. José Lopes da Silva
      11th October 2020, 16:09

      Another excellent analysis, reminding us why we can’t dream too much about ICE and stuff.

    16. This is what FIA & F1 should consider.

      “canvas Honda to cede the rights to its engines to another party. This could be F1 itself, which would lease the rights to an independent company, or grant them to Red Bull to sub-contract supply and development.” __Dieter Rencken

      Cosworth!

    17. AJ (@asleepatthewheel)
      12th October 2020, 4:43

      Such analyses are better off being published on a Monday after a race weekend, as the flood of articles immediately following a race tends to push these beautifully written articles onto the 2nd/3rd page of the site.

    18. Bring back the engines that built the sport…V8’s,V10’s V12’s….focus on actual racing…THAT should be the first priority of a racing series. Technology is a secondary aspect and frankly not important. RACING is what brings in fans and fan support. They lost focus on that when they went to this silly hybrid engine era.

    19. Unfortunately, F1 has already committed itself to a Mercedes/Ferrari duopoly for the 2024-2026 seasons for all practical purposes, simply by sticking with the current engine type. I simply do not believe that Renault will stick around after 2023, unless it manages to make a Mercedes-equalling engine in 2022. The current set-up fails to appease independents or manufacturers, and with the “leave with 7 months’ notice” clause in the new Concorde Agreement, a non-title-fighting engine (the most likely scenario as Renault refuses to commit to Mercedes-like expense), Renault can be expected to leave if/when that becomes apparent. (I want Renault to surprise me and it did 15 years ago. However, surprises are called “surprising” for a reason).

      The way I see it, F1 has two options:

      1) appease the manufacturers. This means one of three options:

      a) switch to a hybrid with zero emissions mode (perhaps mandating pit lane speed limiter = zero-emissions mode, with some sort of true hybrid mode elsewhere to avoid breaching Formula E’s deal). Ideally, any method of attaining zero-emissions would be allowed, but with the understanding that current methods of doing it in F1 (i.e. electric battery) would be the starting point. That’s probably the cheapest option and therefore the most likely to happen in practise. Plug-in mode optional extra, to be considered as and when the technology matures (at this stage, plug-in would be seen only between sessions).

      b) switch to hydrogen cells and/or other experimental technology that is going to be permitted in new cars of 10+ years’ time.

      c) convince the EU and/or American courts that granting such a long exclusivity contract with Formula E is in some way anti-competitive – then going all-electric. Needless to say, that’s the least likely option…

      2) appease the independents. This means asking the independents what they need the rules (specification, price point and other factors) to be in order to come in, provide a compatible ruleset/environment and stick to it.

    20. 2019 HPP Results filed this morning. Looks like a payrise (still a mill less than 2017) after 2018’s big paycut wasn’t enough to keep Mr C onboard….

    21. Unless a car manufacturer runs an actual constructor team – due to the current F1 structure – there is no incentive to just supply engines alone. Because, just being an engine supplier, not a constructor, means no slice of the lucrative financial bonus-system, no political power at the FIA table over engine rules, and no input on team drivers. Why would a car manufacturer outlay massive amounts of resources to get itself into that completely dis-empowered position, whilst still shouldering huge engineering responsibilities for any client team’s performance – and as Red Bull and MacLaren recently proved in regard to Honda, if the engine supplier fails to meet their expectations, the engine supplier will take all the blame – pronto – and without much shame from the chassis constructors. It would be a fools errand for any car manufacturer to currently get involved as only an engine supplier, and this means the pool of engines will dwindle – its down to three, Ferrari, AMG-Merc, Renault-Alpine.

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