McLaren’s departure will hurt Formula E

After three seasons, McLaren has elected to pull the plug on its Formula E project, citing the need to focus its resources on its incoming Hypercar project for 2027’s World Endurance Championship. Thus, the team is set to occupy its fourth guise having started out as HWA Racelab in the 2018-19 season, effectively a proxy Mercedes entry before the German marque launched its full entry for the following campaign.

When Mercedes elected not to continue onto Gen3 as a manufacturer, after winning both drivers’ and teams’ titles back-to-back in 2020-21 and 2021-22, team principal Ian James was put in touch with Zak Brown, who had been keen to grow McLaren’s influence across motorsport after taking over as CEO in 2017. Under Brown, McLaren had expanded back into IndyCar and joined Extreme E; adding the team’s storied name to the Formula E grid thus made sense, given it was taking over the championship’s most successful team. McLaren had, tangentially, been involved before as a battery supplier for the Gen2 cars in partnership with Atieva, but this deal had come to an end for Gen3.

McLaren’s entry would also have to be on a customer basis; it was not about to spend the millions needed to design a highly efficient motor generator unit. It forged a supply deal with Nissan, although the Japanese brand’s first stab at a Gen3 powertrain was slightly undercooked versus the Porsche and Jaguar designs.

That being said, it was nonetheless a winner – both with its works team and with McLaren; Sam Bird took the papaya car to its first victory in last year’s Brazil E-Prix, after a thrilling battle with Mitch Evans in the dying stages of the race. McLaren partied in a manner befitting of the Anhembi Sambadrome track’s primary purpose. With Nissan’s second homologation of a Gen3 powertrain for the Evo variant of the car, results have been altogether more prosperous. Its works team’s lead driver Oliver Rowland currently sits atop the drivers’ standings, while McLaren’s rookie racer Taylor Barnard occupies fourth overall with three podiums to his name.

For that reason, McLaren’s departure is a blow for Formula E – but not an almighty one, and certainly not to the same magnitude as it was when Mercedes left.

In that scenario, Mercedes had been a title-winning team and one that had shown those who had fared longer in the series just how a manufacturer team could operate. There were suspicions about the brand’s spending on its powertrain development, which eventually led to Formula E implementing a cost cap to curb the manufacturers’ might, but it also had a wealth of expertise at its High Performance Powertrains set-up in Brixworth to tap into. When Mercedes sold the team, it also pulled away its powertrain supply.

The upshot of that was that the customer Venturi team, which had also been hugely successful with the Mercedes motor, could be spun off into a Maserati works team as Stellantis sought to reposition its Italian brand as a force in the EV market. But, given Mercedes’ performance over its three years in the championship, its departure nonetheless left a gaping hole in the competitive order.

As a customer team, McLaren’s exit can be compensated for a little more easily. That said, Formula E CEO Jeff Dodds is aware of the less-than-ideal ‘optics’ of the situation in a globally recognised name leaving, but says that the championship and its shareholders will support James in finding new investment for the team.

It’s understood that commercial factors aside from starting a WEC venture have contributed to McLaren’s decision to quit the all-electric championship; part of the team was underwritten by the Saudi Arabian Public Investment Fund through the branding of Neom – the nation’s ‘smart city’ located to the northwest of the Arabian Peninsula. It is unknown whether this funding was set to be pulled in the wake of the PIF’s greater involvement in the championship itself having set up the “Electric 360” initiative to link Formula E with Extreme H (formerly Extreme E) and E1 electric powerboat series.

Dodds added that, although he’d prefer to see McLaren stay on, he suggested that it could not only present a new opportunity for other manufacturers, but also other brands to get involved.

“We can’t deny that McLaren’s a power brand in racing and therefore we would prefer they continued in the championship,” Dodds said in a call with select media, following McLaren’s announcement.

“But we have currently six manufacturers in the championship, and five of those have already signed up and committed to Gen4. And these are not small manufacturers: Porsche, Jaguar, Nissan, Stellantis Group, Yamaha, these are big globally recognised manufacturers. So I think we’re in a really good place.

“We need to have a pipeline of interested manufacturers wanting to join at the right time. But we also need to have a pipeline of interesting brands that see this as a platform from which they can promote their brand and their brand DNA. We’re talking to a number of those who are showing interest in coming into the championship.

Ian James, Team Principal of NEOM McLaren Formula E Team, and Jeff Dodds, CEO of Formula E, chat

Photo by: Simon Galloway / Motorsport Images

“And as bad as the McLaren news is, it may present a canvas for some of those brands to get in, in the way that they want to, whereas that didn’t really exist before.”

While Formula E has managed to retain many of its biggest manufacturer entities for the Gen4 cycle, it is yet to attract any new ones. Currently, the EV market is in a state of flux; while Chinese brands like BYD and Geely command huge market shares, the likes of Tesla have seen sales crash. That said, this might not entirely be down to the state of the market as a whole, but it scarcely seems as though the EV specialists are queuing up to be involved with Formula E.

One of Formula E’s age-old problems has been in the semi-open nature of the technical regulations; manufacturers can build powertrains, inverters, and develop software – but the batteries remain single-spec components. And it’s range that EV manufacturers are most concerned with, which means their primary source of development lays in the battery. As such, it’s a much more lucrative platform for traditional automakers to advertise the fact that they’re part of the EV market, rather than to truly develop products in racing to trickle down into the consumer automotive industry.

For McLaren, which itself is not an EV manufacturer, the Hypercar route probably suits its modus operandi the best. Dodds says that the door remains open should McLaren wish to make a return in future, and that his focus is on ensuring the 600kW Gen4 package – which has recently begun testing – is a compelling prospect for other entities to become involved with. After all, with one season left on the Gen3 clock, selling the future ruleset will be crucial to keeping the McLaren squad going under a different guise.