F1 engine cost to be capped by FIA – maybe

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The cost of the new Formula One engines has caused seismic upheavals in the customer team budgets, particularly the midfield teams downwards.

Caterham and Marussia went to the wall in 2014 following the massive price hike of the new V6 Turbo hybrid power units which are reported to cost in the region of 20m euros per season.

The fact that FIA did not regulate the fees that would be charged to customer teams prior to the engine manufacturers embarking on their new designs, was an oversight of negligent proprtions.

Jean Todt now admits this oversight: “I take the responsibility of probably not having secured a maximum cost to the customers.

“It’s something we are going to address; it’s better late than never.”

Tell that to the ex-Caterham employees.

The problem for Todt is that F1 engine deals are not up for annual renewal, and Mercedes at present presumably have a waiting list for new customers, should Force India, Lotus or Williams look elsewhere for a power unit.

Matters are further complicated since the FIA sold its right to be the sole regulator of Formula One and created the F1 strategy group.

At present no change is possible for 2016, because unanimous voting wold be required and Mercedes would definitely oppose their engine fees being cut.

A majority decision could make some kind of change for 2017, but the engine manufacturers from 2014 are likely to argue they are entitled to recover the $5-750m they spent on R&D for Formula One.

Add this to the ongoing cost of manufacturing and maintaining the power unit, and there are sound financial arguments to keep the price static for a number of years to come.

But Jean Todt has a plan to overcome these obstacles and reduce the price customers are paying for F1 engines.

“We are going to discuss it,” but added, “I am a realist, so I want to make sure that what we do can be done.

“I need good advisors so that we can go through with the challenge.”

This potential intervention from the FIA isn’t going to drive Bob Fernley and Monisha Kaltenborn to begin cracking the champagne just yet.

In the meantime Ford has declared they will enter the WEC series in 2016, whilst Honda is desperately trying to get to grips with their F1 power unit. Testing restrictions in Formula One mean the engine manufacturers, particularly Renault and Honda, are desperately fighting an uphill battle for parity with Mercedes and Ferrari – and doing so with both hands tied behind their backs.

25 responses to “F1 engine cost to be capped by FIA – maybe

  1. LOL silly FIA! Talk about missing a trick. If they had limited cost then manufacturers would have spent accordingly. It would have still been inequitable as Mercedes could afford to lose the most but likely it would have been closer. Still I am a fan of the new engines, especially when they catch on fire. makes me feel like I’m watching a race from the good old days.

    • Of course, if the FIA had proper control of F1 they’d pay the manufacturers from the TV money to supply smaller teams.

    • Matt, I read on TJ13 quite a fe months back that Mercedes got something like 3 billions-ish in marketing exposure due to winning last year. The next best auto manufacturer was ironicalli Inifinity at 1 billion.
      Considering this, does it matter for Mercedes that they bill 15 or 16 millions? I mean, 1 million is about 0.03% of that marketing gain. In my opinion (with isn’t based on much) nothing would have changed regarding the manufacturer expenses and likely we would have had the same order. It would have made a difference to Catheram, Manor and the other midfield teams though

      • Yeah but the way they calculate that is always a bit dodgy, IMO. Personally I am not convinced Merc would have blown the roof off at Brixworth if the most they could charge for engines was half what they charge now. They probably still would have outspent the others, but it would likely have been a closer contest.

        • Merc spent at least 3 years on the v6t-hybrid. Renault decided to continue developing the blown v8 exhaust tricks to the end. Renault was never going to show up with a competitive PU….

          • Reno have developped a pretty good V4 hybrid, but lost to Ferrari en Merco who wanted a V6. Talk about add insult to injury

    • I was a fan of these new motors.

      Till I realized their expense is way too high, and are squeezing the small teams to death against the hard rocks of the inequitable payments to teams.

      F1 has been dieing slowly for a few months now, and just today Jean Todt says, ““I need good advisors so that we can go through with the challenge.” It gives the impression that he will be sifting through resumes and LinkedIn profiles, scheduling some interviews for the next few weeks.

      Has he been asleep all this time? Is he still asleep?

      Someone get him some coffee, now!

      • FIA should have subsidised for teams under a minimum budget line to be the cost of the old engine packages. Then you would either have a powerful incentive to spend less or a great equalizer as more of your budget could be spent on development.

        • NO! The FIA should not be in the business of subsidizing anyone!!! We don’t need subsidies, we need resource and spending CAP’s. Look at how all the successful sports organizations do it: salary caps. Put a cap on the number of people on an F1 team and the hours they can work and the min and max pay and you’ll get a more competitive grid. No subsidies needed.

          • Depends how the subsidy works. If you mandate that to take part an engine supplier must supply a minimum of two teams over and beyond their designated ‘works’ team at £x million per year then ensure all teams get that amount plus a decent figure to design, build and run a small team then at least everyone can do something.

            You won’t stop teams over-spending but if you can guarantee at least the basics are paid for then a team has no excuse for going bust.

            If the manufacturer wants to spend far in excess of the income they get then that’s up to them.

    • Matt, I also love watching these overly complex engines blow up. The entire unit has far too many integrated major components, to ever be able to achieve consistent levels of reliability. For goodness sake simplify the engines, and the regulations, to ensure a return to proper racing, and not reliability trials, fuel conservation trials, and tyre conservation trials, all of which has taken F1 from the penthouse to the outhouse.

      • @Nev
        “reliability trials, fuel conservation trials, and tyre conservation trials,”

        At least reliability trials and fuel conservation trials have been the backbone of “proper” F1 racing for decades before the arrival of the hybrids in 2014… Cars tended to blow up, or run out of gas, and it was exciting for viewers as it was without constant supervision from engineers. If anything needs to stop, it’s this constant babysitting: drivers should be put in a position where they can blow up their engine, batter the gearbox, or run out of gas with two laps to go…

      • How come Mercedes have only had one failure this season yet the engines have to do much longer distances than in the old days when you could change engine after each race?

  2. I was under the impression that (somewhat ironically) in 2014 the Mercedes was the cheapest PU and the Renault was the most expensive PU. The FIA won’t dare cross Ferrari and I can’t see them being to happy with being forced to sell their units on the cheap. That goes for all the manufacturers.

    If only we had a FIA that sole purpose was to improve the sport, not try and please the big teams.

  3. Well of course all this would get by him, that’s what happens when you only spend 10% of your time on F1.

  4. Why is the blame being potentially pinned on Mercedes here? As has been mentioned, their engines are the cheapest out of the available ones so, if they’ve got multiple teams now wanting to run their products, why would they be the ones to cause a fuss?

    Renault must be pumping money into their engine development almost as fast as their engines pump out fire and smoke, and with them only – at present – having two teams to cover costs it would make sense that they would probably be most opposed to having to sell their products for a reduced price?

    It just seems strange to me that every time there’s a prospective rule change it’s always Mercedes who are cited as being opposed to or potentially being opposed to it when there doesn’t seem to be any evidence to back that, and when it isn’t necessarily the logical conclusion.

  5. I gather in the article that the manufacturer spending $5 on R&D was Renault? :p

  6. “The fact that FIA did not regulate the fees that would be charged to customer teams prior to the engine manufacturers embarking on their new designs, was an oversight of negligent proprtions.”

    I’m actually wondering if the FIA has any regulatory say on the matter of engine cost, or on the cost of ANY bit of the car, for the matter (from tyres to front wings to carbon fiber supply). This sounds like the remit of the commercial domain, and it would seem to me if anyone had a say into these matters, it would be the Commercial Rights Holder…

  7. This is stupid. Do not regulate the cost to consumers, regulate the RESOURCES AN ENGINE MANUFACTURER CAN USE. No more than say 100 people working 10-hour days. This will limit the costs naturally and ensure the brightest, not the richest, get the best toys.

  8. Does anyone know how much the teams were paying in the good old days, when a car would use 2, 3, 4 engines at every race? How would that cost compared to the £20m they’re coughing up now?
    As for Todt’s statement – it’s complete hogwash. As we know Bernie can’t change his numerous contracts with the teams and neither can Todt stick his oar into the team/manufacturer arrangements. He’s attempting to appear to have some interest in F1, when we know he’s waiting for the Dwarf to go, before getting involved.

    • The teams burning up 2,3,4 engines probably got the for free or a symbolic cost (e.g. the factory Honda or Renault teams). The teams that actually paid for engines, probably could not afford to destroy so many engines.

  9. Ford’s entry in WEC will be in GT class, where every car is de-tuned or up-tuned to have the same level of performance by the ACO rules. It costs a fraction of the cost of competing in big leagues. A GT2 car may cost a half million, complete with the engine.

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