Assessing the impact of Honda’s 2021 F1 exit plans

Yesterday, Honda Motor Co., Ltd. announced they would conclude involvement in the FIA Formula One World Championship at the end of the 2021 season. This comes as a huge blow to the sport given there are only three other engine suppliers on the grid. Teams are already struggling to justify their involvement with their respective boards given the financial challenges these companies face in the wake of Covid-19. 

In a speech by Takahiro Hachigo (President, Representative Director and CEO of Honda Motor Co., Ltd.), the reason for the exit was clear:

“…as the automobile industry undergoes a once-in-one-hundred-years period of great transformation, Honda has decided to strive for the ‘realisation of carbon neutrality by 2050.’”

Honda is not the first company to push for carbon neutrality, in fact just about every passenger vehicle manufacturer around the world is already making a play for an electric future with some, like Honda, hedging their bets on hydrogen as well. VW has effectively jumped in the deep end with their commitment to an electric future releasing not only the ID.3 and ID.4 but stating their intent through industrial and political partnerships.and committing to the European Union goal of net zero emissions by 2050.

Audi have recently rebranded to align with VW’s values which seems obvious given their products are inexorably linked in design and production. 

According to Road & Track, VW have hinted they may be looking to offload Bugatti, Lamborghini, and Ducati. Bugatti represents the height of internal combustion engine development (although engine development has since continued), while Lamborghini and Ducati’s market differentiation centres around their internal combustion engines and the noises they make.

The same could be said for Ferrari and Porsche. In fact all of these brands are differentiated in part through the sounds their engines make, position of the engines, the number of cylinders and the sensations that follow.

Porsche’s flat six. Image: Porsche

What are these brands to do when the likes of European Union commits to zero emissions by 2050, yet the thing they are meant to replace to meet those goals is at the very core of their product offering. 

Honda don’t need to consider such things and can therefore make the best decisions based on what they feel is right for the future of the company, even if that means exiting Formula 1. Product planners and senior executives won’t see the point in continuing to spend millions of dollars on a technology that is soon to be outdated in the next couple of decades, nor spending millions of dollars on any kind of association through motorsport or otherwise. 

Will this have a knock on affect with other Japanese manufacturers in other series such as WRC and WEC? And what about Honda’s own commitment to MotoGP? There’s a combustion engine in play that doesn’t seem to be impacted by Honda’s recent decision to focus on the environment. Perhaps it’s a little harder to give up when you’re winning.

The problem Formula 1 has is the same problem those premium brands have of the association with the engine (power unit) alongside other knock-on effects like gear changes. Formula 1 has long promoted the sound of the cars as a major drawcard for fans, yet if manufacturers aren’t spending the money on developing internal combustion engines like Honda, there’s very little incentive for them to spend millions of dollars to be in the sport. 

This places Formula 1 in a very difficult position as we may only see a few, or even worse, just two engine manufacturers in the whole category. This may yet end up as a spec engine category although Ferrari, who for many years built and engine first and a chassis second, may have something to say about it, for Ferrari the engine is the heart of the car. Will we see Formula 1 become a spec engine series? That would seem at odds with the cutting edge technology viewpoint Formula 1 instills in its backers, advertisers, and partners.

The World Endurance Championship has also seen a similar shake up out of necessity given the exodus of Audi, Peugeot, and Porsche over the last ten years leaving only Toyota as the only vehicle manufacturer flying the flag in the top tier LMP1 category. The series promoters have now reignited interest in the category by completely revamping the rulebook to allow only road-based hypercars to occupy the top tier, but the line-up thus far is fragile at best.

Toyota’s GR Super Sport. Image: Toyota

Who is going to ensure Formula 1 marches ahead with internal combustion engines? Those who rely on its continued development for their road going products such as Lamborghini, Ferrari, Porsche, and probably a few other interested parties such as the entire muscle car industry, along with Formula 1 and Liberty Media, sending the message that the internal combustion engine can indeed be made carbon neutral.

And that’s what all of these interested parties will need to focus on—the carbon neutrality of the internal combustion engine instead of chasing power gains.

For Formula 1, without internal combustion engines, it is simply Formula E with a bigger budget. Maybe they should acquiesce and simply find other ways to make it work, but there’s going to be a time when they’re going to have to make a call. Honda did, but they have much less to lose.

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