Lotus retain an option for the supply of a 2016 Mercedes PU

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Imagine a chain of people looking to sell their house and buy another, only in that chain the last person is buying the first person’s house. The throw into the mix that the last deal can’t be completed until the first one is across the line. This is kind of scenario where Red Bull, Renault and Lotus find themselves in. However, the simultaneous agreements required may be even more complex than this.

Of course Renault and Red Bull cannot dissolve their agreement to supply a full-blown PU for 2016 without agreement. The financial penalties for breaching this on either side are enormous. Red Bull also need to secure agreement from Renault on an ‘unbranded’ engine deal for 2016. Renault can’t complete their acquisition of Lotus until all this is agreed, because it would hand Red Bull a potential loophole for a breach of contract agreement law suit. Red Bull are widely reported to have a clause in the contract which sees them be offered preferential treatment – something which Renault can’t deliver if they own their own ‘works’ team.

In the meantime it would appear that Lotus have terminated their contract for a 2016 Mercedes PU, because Mercedes have stated they will be supplying Manor F1 – along with Williams and Force India in 2016.

In a recent interview at the Mexican GP, Jean Todt confirmed that the FIA regulations as they stand mean an engine supplier can supply no more than three customer teams. Todt also admitted there had been mistakes when the new PU regulations were framed and that the engine manufacturers should have been forced also to provide a minimum number of PU’s to customer teams – if requested.

In an interview with F1.com, Matthew Carter CEO of Lotus F1, reveals the power unit options available to them for next year. Well, we have two options for an engine next year: either we go with Mercedes or Renault. We are progressing along that route. We’ve got two designs for next year’s car and we are pushing forward with both options”.

Besides the fact that the current two chassis option programme must be costing Enstone a pretty penny, this admission that a non-acquired Lotus would run a Mercedes power unit is puzzling.

An engine manufacturer can apply to the FIA to be allowed to supply more than three customer teams, however, Mercedes recently refused Red Bull Racing a PU for next near on the basis that their production capacity was now at the limit – given the signing on of Manor F1.

It maybe that Manor F1 merely has an option to take a Mercedes PU – IF Renault acquire Lotus, and if that happens Carter confirms will see the Lotus name dropped. This would mean Bernie Ecclestone would be petitioned to provide assurance that a change of team name, does not see the Enstone outfit treated as a new F1 entrant. The FIA also has to approve a team name.

Were Manor’s 2016 Mercedes’ engine supply prove to be just an option, it is not clear what options would then be available were Lotus to remain an independent team in F1.

Ferrari have also said they only have capacity to supply 2016 power units to one of the two Red Bull teams along with Haas F1 and Sauber – and Franz Tost stated at the Mexican GP that deal should be done in two weeks.

Whilst being pragmatic, Matthew Carter is also very optimistic that the Renault acquisition will take place. “Well, we know that in business anything can happen and as long as there are no signatures on the documents the deal is not concluded – but confidence is very high!”

Of course Carter will be broadly in the loop of the state of play between Renault and Red Bull. And for now the tangled web of F1 engine supply for 2016 is more than making up for the lack of intrigue in the F1 driver market.

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11 responses to “Lotus retain an option for the supply of a 2016 Mercedes PU

  1. I wonder why the F1 world keeps on providing the EU with more reasons to rip up the bilateral concorde like agreements almost on a daily basis? Does everyone want to get rid of those contracts that badly?

    This is clear evidence that the engine manufacturers like to decide who their competition is and not the governing body and I wonder how long it will take before this ridiculous situation is over.

  2. Are we even certain – today – that Manor will be on the grid season 2016?
    Could be a Mercedes allocation going spare.

  3. Sounds like no one has actually ripped up any contracts and Merc may be in trouble. Merc have publicly stated they will be supplying Manor. So if Lotus still have an actionable option on Merc PU, they are playing hard ball with Red Bull in their negotiations. Seems like they need to get Red Bull, Lotus, Renault, Manor and Merc round a table and don’t let them out till they have a workable deal for all of them 🙂

  4. “In the meantime it would appear that Lotus have terminated their contract for a 2016 Mercedes PU, because Mercedes have stated they will be supplying Manor F1 – along with Williams and Force India in 2016.”

    No, they did not. Toto Wolff said that in anticipation of Lotus being bought by Renault, they were willing to supply Manor with Mercedes engines.(Some media claim he needed to act fast to prevent Red Bull getting the engines.)
    In fact, Lotus is building two cars for 2016. One for the anticipated Renault engine and one for the Mercedes engine if the deal with Renault falls through.

    • Does Lotus have the money to build 2 different cars? isn’t that effectively wasting money that they don’t have?

    • Building and designing are 2 different things. To be clear, you meant designing, correct?

    • Wouldn’t it be funny if Renault do buy but ask Mercedes to honour the contract? Presumably there is nothing to stop them doing that. If they are then not supplying anyone with engines I guess they could take a year out to redesign their own unit without being restricted by the rules?

      The only thing I was wondering, have Lotus breached the contract by late or non payment?

  5. Where does that leave Renault? Are there going to be any cars with Renault-branded engines in 2016 season?

    • I was going ask the same question but you beat me to it! If they do not run in a Lotus tey will have nowhere to put their power unit so it would seem that it is Lotus or bust for Renault. Surely they cannot justify buying Lotus and not running their PU or so one would think. However I suppose that there is some sort of ‘corporate relationship’ betwen Renault and Mercedes so maybe anything is possible. The silly season is proving to be most entertaining this year – just as well as championship interest is ended!

  6. The limiting factor in PU supply is more resourcing than manufacturing. There are only a limited number of trained engineers available to provide trackside support. Manufacture is relatively easy to scale, while people aren’t.

    Additionally, the response to a competitive team may be quite different to a team which wouldn’t be expected to challenge Mercedes. I suspect Mercedes could ‘find’ a few engines for Lotus if needed.

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