F1 engine manufacturers want new entrants to pay ‘commitment fee’

2021 Italian Grand Prix

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Formula 1’s existing engine manufacturers want any new entrants to pay a ‘commitment fee’ to secure their participation in future championships, RaceFans has learned.

Discussions around the sport’s next engine rules package continued in a meeting at Monza this morning. Among the proposals tabled was a plan to drop the heat energy recovery technology known as MGU-H from F1’s power units.

Manufacturers currently participating in F1 have spent heavily on developing the MGU-H and are not prepared to drop it without a firm guarantee from another manufacturer to enter the sport. They want any newcomers to pay a substantial commitment fee.

The Volkswagen Group and its Audi brand is known to be involved in discussions around F1’s rules.

Two other significant sticking points were encountered during the negotiations.

One concern is whether Red Bull, which will take over Honda’s production and supply of power units after the manufacturer leaves the sport at the end of the year, should be considered a current manufacturer or a new one, and therefore must pay the fee. Red Bull, which is building a new Powertrains facility at its Milton Keynes base, argues it should be considered an existing manufacturer, a view disputed by Mercedes.

Another area of dispute regards the timing of the introduction of the new engine rules. The current engine formula is due for replacement in 2025. This falls after the end of the current Concorde Agreement, which defines how the sport is governed.

The existing manufacturers wish the new rules to come into force while the current governance arrangement is in place, so that the FIA cannot unilaterally impose a drastic chance in regulations. RaceFans understands the possibility of extending the Concorde Agreement by one year was also discussed at the meeting.

Mercedes team principal Toto Wolff confirmed yesterday the existing manufacturers were considering concessions aimed at increasing the number of engine suppliers in the sport.

“The MGU-H is going to be dropped if we can find alignment of many other points,” said Wolff. “I think it’s a compromise – I cannot speak for anybody else but at Mercedes we are prepared to enter in order to facilitate the entry of the Volkswagen Group. But there is several other topics that compromise needs to be found.”

The FIA and Formula 1 issued a joint statement following the meeting. “Today a meeting took place involving the FIA, Formula 1, and existing and prospective power unit suppliers on the potential new power unit,” it said.

“The discussion was positive, and progress was made – some details remain to be addressed, however we expect these to be resolved in the coming weeks.”

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2021 Italian Grand Prix

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14 comments on “F1 engine manufacturers want new entrants to pay ‘commitment fee’”

  1. So would a commitment fee be like pay X sum of money and get it back as the time goes by. Let’s say competing 10 years would get all of it back, competing 5 years 50 % of the original fee and so on.

    1. Unlikely.
      It would almost certainly be more like the $200m anti-dilution fee is for new teams – as in, all that money goes directly to the other engine manufacturers.
      That’s why they want it. Either they get more (marketing) value from their existing investment in the current engines, or they receive financial compensation from any new competition to change.

      Win win for the existing ones….

  2. Merc v Red Bull is like 2 small children arguing over everything. Surprised ones not complained about the volume of music coming fro the others garage.

    1. They do argue about the volume of music. Red Bull is notorious for playing very loud music from their garages and annoying their neighbors.

  3. I suppose dropping the turbo increases the noise, but its then less road relevant to the (tend to be small capacity with turbos for most cars) isn’t it? So we’ve given up on that?

    1. @falken mgu-h is not the turbo, it is the turbo’s kers.

    2. The internal combustion engine would be weaker than weak without the turbo-charger.

    3. If we were to follow road relevence as a director, we’d need to phase in electric F1 cars. Right now, it seems they will keep the petrol engine because it improves the sport (& I agree), but lets not pretend relevency has any part of the argument anymore.

  4. Is f1 dumbing itself down to ACO levels. Surely F1 is not as desperate as Le Mans. F1 does not need to chase the porsche popularity. Liberty have some respect for f1.

    1. @peartree the ACO could also point out that, with the deal to also allow LMDh cars to compete at Le Mans alongside the Hypercar class, they have confirmed entries from Toyota, Ferrari, Porsche, Audi, Peugeot and Honda/Acura, Cadillac currently preparing an entry and a potential semi-works entry from BMW, as well as the privateer Glickenhaus entry.

  5. Barry Bens (@barryfromdownunder)
    12th September 2021, 13:51

    Red Bull obviously wants to create a precedent for when they (eventually) sell their operation to a VW-party. If they can take over Honda without having to pay for being a new entry, naturally they’re going to use the same argument later down the line.

    The problem I’m having with Mercedes (and probably Renault and Ferrari who support the payment from new entries) is that they’ve seen with the amount of teams what such a requirement means: they want more teams but none will join because the price is too high. The same will go for engine-makers and yet the existing ones demand money. All while claiming they’re open/want new creators in the sport. If that were really true, they wouldn’t even bother with asking money.

  6. The commitment fee sounds fair.

    Sounds more and more serious now. Looks like VW could really enter.

    1. Not sure about that commitment fee @balue. But I do agree that it points to actual serious interest of VW (and the possible route of getting in via Red Bull if that is cheaper)

  7. Can we go back to time when car was fast enough it qualified to race.

    It’s bit of closed shop mentality

    Personally I would like 26 plus cars on grid. More entertaining and more options for drivers

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