Formula E probably hoped that its preseason test would be the cause of many headlines this week. Ahead of the electric racing series’ seventh season start in Chile in January, 12 teams gathered at a race track in Valencia, Spain, to run their new cars in earnest for the first time. Instead, it was the sudden announcement that both Audi and then BMW will make season seven their last that got most of the attention.

Predictably, the sport’s detractors have been quick to seize on this as evidence that electricity and racing cars just don’t go together. Here’s why I think they’re wrong.

Racing to make better road cars

When Audi unveiled its FE07 last week, the team held a virtual tech talk showing off its new Formula E powertrain. Called the MGU05, it’s a compact package of carbon fiber and metal that makes the series-mandated 250kW (335hp) with 97 percent efficiency and an overall mass of just 77lbs (35kg). For the first time since Audi entered the sport officially in season four, it developed the powertrain completely in-house, an experience that Stefan Aicher, head of development e-Drive at Audi Sport, said was “one of the most intensive and challenging projects ever.”

Why would a big car company go to this kind of effort? “The company principally differentiates itself because of its technical excellence, and that’s been right back from the beginning in the Audi Quattro rallying times—remember the development of quattro systems,” pointed out team principal Allan McNish. That led to IMSA and DTM campaigns to prove all-wheel drive in the 1980s and 1990s, then to the all-conquering Le Mans program that used racing to prove new technologies like direct injection, hybrid systems, and even laserbeam headlights.

In 2016, Audi killed off its endurance prototype program in favor of Formula E. At the time, then-chairman Rupert Stadler explained the switch to Formula E, saying, “As our production cars are becoming increasingly electric, our motorsport cars, as Audi’s technological spearheads, have to even more so.” And the road-relevance of Formula E competition was also brought up by McNish last week. “That [technology] filters through, and it’s on the car that Lucas [di Grassi, one of Audi’s two Formula E drivers] and I drive every day on the road and also everybody else at home as well,” McNish said.

Nothing left to learn

But six days after telling us about how Formula E was helping make its electric cars better, Audi’s tune changed. In 2022, the German OEM will enter the Dakar Rally with a series hybrid off-road race. And it’s going to return to endurance races like Le Mans and Daytona. The price is its Formula E program, which will end at the conclusion of the coming season. “We are taking the next step in electrified motorsport by facing the most extreme conditions. The many technical freedoms offered by the Dakar Rally provide a perfect test laboratory for us in this respect,” said Audi board member Markus Duesmann.

Yesterday, BMW followed suit, revealing that it, too, was leaving Formula E at the end of season seven. And the company said the quiet part out loud. “When it comes to the development of e-drivetrains, BMW Group has essentially exhausted the opportunities for this form of technology transfer in the competitive environment of Formula E,” BMW said in a press release.

One of Formula E’s big selling points to competitors is that it’s actually pretty cheap compared to other global championships. Audi spent hundreds of millions of dollars between 2000 and 2016 to win Le Mans 13 times. Even with its new cost cap, Formula 1 teams can (and will) spend $145 million a season. But you can compete—and win—in Formula E for a tiny fraction of that, with COVID-induced belt-tightening making next season even more affordable.

A major factor in keeping Formula E budgets so low is the fact that many technical aspects of the car are tightly locked down. Everyone uses the same make of chassis, and even batteries are standardized to prevent teams from engaging in an expensive arms race creating power-dense chemistries that excel on track but have little relevance for production cars.

That leaves electric motors, power electronics, and software as the only real avenues for development. Even these are limited in the number of upgrades allowed each year, and it seems both Audi and BMW have learned all they can.

OEM racing programs come and go

If there’s one thing you can guarantee about racing, it’s that OEM involvement will wax and wane. A day after Audi’s announcement and a day before BMW’s, Volkswagen axed its entire motorsport program. Porsche has ended its American factory-backed race program. And of course in October, Honda called time on its Formula 1 program.

If the critics are right, and losing a sixth of its manufacturers spells serious trouble for Formula E, what does that say about the health of Formula 1, considering that series loses a quarter of its manufacturers with Honda’s exit? Lest we forget, Honda is leaving Formula 1 because it says it’s more important to spend that budget—$146 million a year—on developing electric vehicles instead.

That’s why I’m not too concerned about the loss of BMW and Audi from Formula E. The sport is currently capped at a maximum of 12 teams, and that means there are slots for two new entrants in 2022, which also sees the introduction of the Gen 3 race car. A Honda Formula E team has already been ruled out, but I wouldn’t be surprised to see Hyundai taking one of the available slots; the company was known to be eyeing the series even before its huge electrification effort.

We may well see the other entry go to one of the many EV startups. After all, a few million dollars’ worth of publicity generated by a Formula E campaign is barely a drop in the bucket when investors are throwing billions at just about everyone trying to follow Tesla’s lead.

Listing image by Audi

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