Should teams be paying for F1's engine mistakes?

0:01This is a Global Player Original Podcast.

0:41score. It's Will. It's Naomi. It's David. It's Jolie. Welcome to Up to Speed. Well hello everybody all four of us on this episode and we have got so much to discuss today. I mean big big news coming from the FIA F1, that there are some potential major changes in the sense that F1 are looking to go back to more of a 60-40 rather than a 50-50 engine split next year. And more importantly than that, in even bigger news, DC has invited us to Monaco for an episode. Yes. Hey, we're a team. You shouldn't be surprised by that. So just to get an understanding, are we like going to be on the yacht or like, I just need to make sure I pack the right sort of attire.

1:25No, Yacht's in getting service at the moment, so it'll be at the villa. Mine too. OK, the villa.

1:34Good one, Jolie. I'm looking forward. I'm looking forward to hosting you guys there. And we can do a sunshine up to speed. We can all be there in our bikinis, in our Speedos, you know, just sipping cocktails and sharing the breeze about Formula One. After a month in downtown Indianapolis, the south of France, that was very, very nice. Are you going to be coming back with an American accent? Are we going to recognise you? I haven't done yet. Although I was at home the other day and obviously I was packing my suitcase to come out here and we've just moved in and I don't know where anything is. And so I said to my wife, I said, where are my pants?

2:10And she said, top drawer where they always are. And I was like, no, not my underpants, my trousers. And she just looked at me and gave me this long stare and was like, they're trousers. I was like, okay, sorry. To be fair, I always get that wrong, always, because I also think that pants are trousers. But anyway, I'm learning that that's not the case. But maybe we should take this podcast on tour and everybody picks a location they want to take us to. And then we go do it. I think that sounds like a great idea. Hey, guys, before we get into the big news surrounding Formula One, can I indulge myself with a bit of reminiscing?

2:42Please do. Thank goodness you all said yes. So I got behind the wheel of RB7 at the weekend because Jean Alessi, who former Formula One driver for Jordan, Ferrari, Prost, and I'm probably missing another team. Benetton. Benetton. Yes, correct. He is the president of Paul Ricard, which is the Formula One track in the South France. And they had the classic at the weekend. So they had Hadjer, Ocon, Gasly, Prost from going way back in the day. I saw Panis and Tambi were there Panis, Tambi Lafitte the whole bunch of guys Jack Lafitte yeah absolutely so it was really cool to be there and it was a sell out the amount of people that love historic Formula 1 cars is pretty impressive so I got to scare myself driving on the big circuit going flat out into Senior Corner a corner I used to take flat out when I was young, dumb and full of commitment.

3:43I was breaking and shifting down. Breaking and shifting down and then getting back on the power. But anyway, it was a real adrenaline rush. Mate, that's a gnarly corner. Very, very, very jealous. That sounds sensational. I was very, very scared. I was just going to ask that. You know, have your nerves with age, dare I say, have they increased? Yeah, 100%. I'm fragile now. I was invincible when I was younger. but you know it aches when I put my socks on in the morning so can you imagine what shunting a Grand Prix car would feel like you know you've got about two miles of runoff at senior you'll be all right yeah you're still young at heart do you say listen we're very happy you didn't shunt it so we wouldn't you know you're all in one piece you're feeling great today because we've got to discuss some big big news some big big potential news maybe I should caveat and say that.

4:34F1 are agreeing to potentially ditch the 50-50 engine split. Now, that is big news, isn't it? I mean, we were talking just a couple of weeks ago about, you know, using Toto's analogy of the fact that they only took a scalpel to the regulations rather than a sledgehammer. Have they lost their scalpel? No, I still think it's a, it still feels like a scalpel. You know, I think there were a lot of conversations about would they change the architecture of the engine um you know would you have to have a complete redesign of of everything in order to get on top of this and and what it it seems that they've agreed to is it's it's it's piecemeal but it may have a big effect essentially you're going to increase the output of the engine by 50 kilowatts and you're going to decrease the output of the electrical size of the power unit by that same 50 kilowatts.

5:31So you take it from a 50-50 split to closer to a 60-40 split. The way in which they're going to do that, and this may sound complex, but essentially you increase the fuel flow. So you allow more fuel into the engine, so you get more power from the engine, thus increasing to 60 and decreasing the electric. The offset of that means you're going to need more fuel because you're burning more of it. You're allowing more of it into the engine, which means they will have to substantially redesign and move away from whatever development path they'd wanted to create. Some pretty substantial parts of the car.

6:08As I said, bigger fuel tank, you're burning more fuel, which means you're probably going to need to change cooling. And they may even want to adapt, you know, parts around the turbo. So there may be a slight change on engine architecture, but nothing, nothing substantial on that. We should probably pick up on here and just emphasize the fact that this is set to happen, if it happens, for next year, right? We haven't mentioned that. So this is not far down the line. It's next year. And so there's a lot we've got to talk about in terms of what ramifications that has on development. And, yeah, what is the knock-on effect of a decision like this if it does come into play?

6:42More money. More money will cost the teams. But in the end, I think that the public have spoken. I think that Miami gave us a good Grand Prix but the first few Grand Prix's there was a bit of confusion there was a bit of frustration and I think that the tickle that we saw there and the nature of that racetrack gave us less of an issue and I think that we all would agree I think we all agree and I'm sure the drivers well they've certainly been vocal enough to say that they want let's call it 100 % qualifying laps they're still the best driver will make the best use of the technology that's at their disposal.

7:21So I don't really take anything away from that. But the lift and coast element, the recharge element, arriving at the braking point at a lower speed than would have historically been the case in the past is something that I think we're going to see more and more reduction in that. And we'll get back to, let's say, normality when it comes to qualifying. But as we've discussed at length, there's always been an element of management through Grand Prixs, whether it's going way back to the early turbo days or carbon breaks and all of the other good things that we have today. And I mean, online, it's been quite interesting to see everyone's reaction because I wouldn't say it's been a 50-50 split with what people have said, but there is a small percentage of people that are saying, how can teams prepare properly if the target keeps moving?

8:06And why should teams be paying for the FIA's mistakes? But then you've got the bigger fan base that are saying, thank goodness they're changing now before you know f1 becomes a laughing stock you know there's all this constant complaining and what i think more than anything i found really interesting over the weekend is this is you could argue a very big win for verstappen you know it shows his influence his power everything he's almost been there complaining about they're looking to change slash potentially changing slash changed already. And I think for the fans, it makes us all seem a bit more heard because they're listening and they're changing.

8:49And I think that that's been the most positive thing to see. I mean, obviously, it's difficult to talk about this today because it's not been set in stone. It's not been decided on 400%. We don't know if it actually is going to come into play. But I think given the nature of the conversations that seem to have happened, it looks very likely to be happening. And I think a decision will be made very soon if they do decide to go this way. But there's so many different factors to this, right? There's a political aspect of, you know, obviously Mercedes are out in the front, happy with their engines, happy with their performance.

9:16And I think some would say, would this be punishing them in some way because this could have been their era of domination yet again? But obviously there's a lot that's going to change. And as you mentioned, both of you, DC and Will, you know, this battery is just not efficient enough. And so the drivers are having to manage and manage and manage. And ultimately, if you do decide to go 60-40, there'll be less battery management because the battery will be lasting better, be more efficient. But as Will said, this means you need to burn more fuel and more fuel means for some, maybe not all. We don't know how lean the teams have gone with their fuel cells.

9:54But for some teams, it will mean that they need a new fuel cell. And a new fuel cell potentially means dramatic changes to chassis, which will already, I mean, teams will have already got pretty far into their designs for next year and almost in the process of building a car for the wind tunnel, which I think the deadline is usually around June for teams to get that car into a wind tunnel. So do they just go back to the drawing board now and like how do we stick to timelines? I think, Naomi, you know, what you said about this not being put through is it's important to remember that. But, you know, I don't think it's far off, you know, becoming 100%.

10:33It basically just the FIA. And again, it's in collaboration with the teams and the major stakeholders and F1 themselves. They've come to this agreement together and it now just has to go through sort of an official vote until it's ratified and put onto the regulation books for 2027. I can't see any any world in which it changes too much from that because it will have already gone through so many points of discussion. But you're right. The changes to the cars are substantial. I'm thinking of teams like, particularly like an Aston Martin when they came out with their car this year and everybody pointed at the side pods and pointed at the very tight design of the car at the rear and said, well, Adrian's gone really extreme with the design of the Aston Martin this year.

11:17how much of that or those extremities will he have to lose in designing a new car because number one you've got to put a larger fuel tank in the back so that increases you know the size of the fuel tank so decreases the ability to to fit everything around it without also increasing the size at the rear you're also going to have to increase cooling so that means side pod designs are going to take a massive hit in terms of of their freedom to work around that because you're going to need larger side pods, large cooling. And all of that, Naomi, as you say, with designs which will have been put in place, you know, natural evolutions, natural updates and upgrades, they're now not natural anymore.

11:55It's revolution rather than evolution because you're having to rethink, you know, a set of regulations that you thought were static. But here's the thing, kids. It's difficult. It's Formula One. If it wasn't difficult, we'd all be running Formula One teams. So, yeah, all of that redesign and all of the work we have to do, that's what Formula One teams do brilliantly. And I was asked a question at the weekend, actually, you know, what did I miss about Formula One? And it's not the driving and all that kind of thing that you would imagine, but it's about being around high-achieving, can-do people who don't go, well, the problem is, they go, ah, this could be a solution.

12:32It's just a little change of attitude. And also, just to clarify, in increasing fuel cells, if that is the case, we are sustainable fuels, we're biofuels, we're saving the planet with every lap of Grand Prix racing that we do. So do not fear those who think that we are doing bad things to the environment. Drops the mic. No, DC, I just want to pick up on that because I totally agree with you. Obviously, you know, we are so lucky to work in this environment that is just filled with so many brilliant minds that actually have been, you know, used in spaces like when, you know, when COVID happened, some of those minds were put to, you know, creating ventilators and building them, et cetera.

13:13So, you know, we don't underestimate the potential of what they can do. However, on that, you know, we still do see the likes of a Williams or, you know, it can happen to any of the teams rocking up late for testing. So when something like this that's really not predicted or scheduled or planned or whatever comes in, do we believe that that will then have an impact in terms of performance at the beginning of next year? Will people be like on the limit? of course yeah I think it's definitely going to have an impact of course it of course it will the extent to which it will have an impact and who it will impact the most you know we we got to wait and see but it's it's it's a nice curveball is there a bigger advantage to the teams that aren't doing as well because they can start to focus on next season now always always yeah and also the if you're winning the championship you get a penalty in the amount of aerodynamic and CFD, which amazingly, given the human nature of Formula One being restricted in computational fluid dynamics, this is the virtual world of which they design a lot of aerodynamic parts.

14:21So when Mercedes dominated for a period of time, they were getting less and less development availability. And those that weren't doing well are getting an advantage where you can spend more time in the R &D side of things. I know one thing, and I'll put money on it right now, Williams will not be late to the first test of next year because under James Vowles' watch to miss, for various reasons, the start of testing this year is, you know, that's just, that's one of those things where you go, I'm not ever going to be in that situation again. I would be very interested now to see what happens to a Williams and Aston Martin, a team that is struggling at the rear of the field in 2026 for the remainder of this season.

15:03I would imagine that their upgrade packages will start to diminish in their frequency and effectiveness over the remainder of the year as they focus solely on 2027. And that's a brilliant point you guys bring up, because if this year is a write off, we'll just write it off because you know it's changing for next year and focus everything on that. But of course, they're not going to be able to just yet. Aston Martin may be a little bit more than Williams, but Williams are still dependent on exactly what the Mercedes will look like. Will they change the size of the turbo on that Mercedes? What's the architecture of that engine going to look like?

15:38And if that hasn't been signed off yet, then they can't start to design the car because the basis of all of it is the size of that engine and how much room you've ultimately got to play with. Aston Martin are in a slightly different scenario in that they are solely working with Honda. And that is very much a program that is two-pronged from them. So they'll have a far better understanding of what that's going to be. But yeah, even for a team like Williams, you know, if you're a customer, you ultimately, it's still going to come down to what Mercedes determined to do for next year. And that might all change, you know, with ADUO, you know, the ability for engine manufacturers to upgrade their engines through the year.

16:20It's not in any way an easy scenario that any of the teams are facing right now. I mean, do we think Adrian's buzzing? Like, do we feel, you know, he thinks he's kind of got a lifeline. Wheatley's probably rubbing his hands a bit to this. You know, I almost wonder if he had some form of information before he made that decision to leave. Hold on. Talking about it, talking about information. I saw a photograph and Wheatley was at Rickard. Did you have a chat with him, DC? And what's the latest? Well, he was there on Saturday and on Saturday I was celebrating my wife's birthday. so I was not there.

16:59You don't remember anything. Yeah, I was there on Sunday only. Hang on a second. Besides deflecting the answer to the question, there's something much more important that just got dropped in there that we all just allowed to fly over our heads. Did you say wife? Because I don't remember being at the wedding. Oh, no. No, but we've been invited to the house. Oh, no, this is a scenario we must avoid at all costs, DC. You're going to get in trouble again. This is where I'm going to have to call you. It was that you were the drunkest guest at the wedding. And I'm not surprised you can't remember anything about it.

17:34Shame on you. As if, as if. I wish. We were bridesmaids. I wish that was the case. Okay, okay. Well, I also heard that Stefano was at the GP Historic this weekend. So did you have any chats with Stefano? Yeah, Stefano, he's an energy source, isn't he? You know, super enthusiastic about the growth of Formula One, super confident that, you know, these little speed bumps that we've been having in the beginning of the season will be sorted out. And actually, as a leader, as a CEO, then, yeah, you've got to understand that. But I think between the hype and enthusiasm and the reality, we're slowly moving towards where we need to be.

18:15Well, can I just bring it back to the topic of these changes or these so-called changes? F1 already raised the cost cap significantly because of the 2026 regulations. And now the question is, again, a lot for these smaller teams, why should they be paying? Again, because next year they're going to have to pump in even more money. They're going to raise the cost cap even more. Why should they be paying for FIA's mistakes? That has to be a conversation for us to have. You're always building a new car, right? You don't carry over the same car from one year to the next. Every year. Regulations are implemented for a significant time period.

18:56Yeah. And I mean, I think it's a very good point because we haven't even dived into what Audi are going to think of this because obviously they came and agreed to enter F1 on the basis that it was going to be a 50-50 split, which is now not going to be the case. So that's probably like tricky, a tricky conversation, a very political one to have. but also just from a financial perspective i mean we are they obviously the big manufacturers like mercedes like ferrari etc but these teams will have spent hundreds of millions potentially in the billions on development of these engines so you know you probably expect sort of a return on that investment in three four years down the line but if we go back to designing all of that stuff does that not have a massive financial impact not just on the big teams but particularly the smaller teams who also need to make changes to the chassis as we've mentioned yeah but let's let's just take a step back for a moment we are in one of the the most complex eras of formula one powertrains they they are billions they're the you know the investment from red bull and doing their powertrains investment for ferrari and investment for mercedes is billions if we are looking at the future of formula one and formula one as an entertainment business as well as a sport having a normally aspirated V8 or whatever many cylinders you want to have, is 100 % sustainable.

20:15All of the parts that go into that can be recycled, unlike most of the batteries, once they've run their course, which they dig a hole and shove them in the ground. So we get into a very sustainable, entertaining business. And Audi and all of these teams get publicity out of being a Formula One, and the sport has grown massively. Whether you're winning or not, you're still gaining a lot of publicity. If you go to Le Mans and win Le Mans, it's a fraction of the publicity of being on the grid at Formula One. You imagine, you get an invitation through, you're a high-end Audi customer, the invitation comes through, please join us as a guest at the Monaco Grand Prix or please join us at the Le Mans 24 Hour.

20:57Which one are you going to say yes and which one are you going to say no to? DC, I understand what you're saying and I agree with you to an extent but the likes of Audi haven't pumped multi-millions close to billions into this just so they can invite their high-end customers and make them happy to buy some more cars. Eventually they want to be in it. Why else are they in it? They do eventually want to be near the top. They'll want to win. There will be that viewpoint at some point that they want to get closer to the top. And I guess my argument is if they keep moving the goalpost, how can they score?

21:29But also just on the financial bit, because this is to bring it back to that part, is that they've spent all this money developing these engines. They're now going to spend loads more to make these potential changes and then only for it in three years down the line or two years down the line to change back to V8s. That's the more interesting thing for me. I'll don't get Will started with the V8s. No, but seriously, not the changes for next year, but the fact that, Naomi, as you say, they brought Audi in on the promise of these are the engines and then they're going to exist for five years and then you're going to chuck them out and go for something completely different.

22:05that that's a far bigger question but i think look when you get involved in formula one if you're a cadillac right or you're an audi you know that you're not going into a sport where it costs pennies to compete you understand that the regulations can and will change you understand that it is going to be a massive outlay of expenditure every single season and you prepare for that you prepare for that under a budget cap if the budget cap suddenly increases and you're rowdy, you're Aussie, like you're fine. If you're Cadillac, you're fine. If you're House and you're Williams, yeah, I can imagine that there's a there is a little bit of worry coming in there.

22:43But with the amount of money coming into the teams and the opportunity and the availability of sponsorship to come into teams now being higher than it ever has been in the past, I think most teams are at or close to being, you know, on the budget cap. And so I don't think if the budget cap increases in order to allow them to make these changes, they're going to struggle too much. Formula One's in a boom period. Absolute boom period in terms of the amount of money coming into the sport. Yeah, and if you look at Audi, I don't know the exact figure, of course, that they paid to buy Sauber, but let's say it was hundreds of millions, right?

23:17Straight away, that team is valued at, what, 3 billion? I don't know, 4 billion? Just think of a number. The valuations in Formula One is huge. So let's remind ourselves, Red Bull, for instance, bought the Jaguar Formula One team for a dollar. They took it over and took its debt over. And they've invested billions over the 20 odd years that have been involved in the sport. But they've got the massive valuations as well. So I'm not sure the Audi Le Mans team would be worth anywhere near, not even scratch the surface of the valuations there. So let's remind ourselves that this is big business for a lot of these guys.

23:57So we're all focused on the performance and the sport and entertainment. there'll be other people that are here purely because they will make money. I mean I think it's almost as if the studio versus remote today I mean I completely understand what you are saying and Will you mentioned it before that they sign on and they know that there will be changes but you know correct me if I'm wrong it's quite unprecedented for there to be two potential regulation changes just four races in no one would have been expecting that. But I think that's a huge positive. And also, if you recognize that your product is failing, then you have to invest in that product to ensure that you maintain market share and to ensure that you maintain your position.

24:44And so as a team, and also the teams have got to vote for this, right? The teams have agreed this. This is the part that I was saying about the politics, right? Like, how do we get all the teams? It has to be a unanimous decision. If one team's against it, it's not happening. So, Will, how do they manage that? Well, if they couldn't afford it, they wouldn't vote for it. Yeah, I think that's a good point. And I agree these changes needed to happen. I'm just saying on the side of money and the smaller teams, that's definitely into consideration. And I think the only team that, you know, you'd look at, obviously take away all of the conversations of money, Mercedes have adapted the best to these regulations, but they're not going to vote in favour of bad racing just because they're winning.

25:27And Toto's already said that, you know, given enough lead time, he's happy for this to go ahead. And also, listen, we're not we're not dealing with Formula One of 30 years ago in the 1990s where teams were at threat of folding. you know i don't think that having this regulation change is suddenly going to bankrupt a team and force a team to sell or anything like that i think i think we're probably being a little bit woe is me over these multi-billion dollar corporations as they all are now it's formula one you know shit will get off the pot as it's ultimately well i really hope that it's not coming across at home like we're negging this potential idea because and maybe i'm speaking on behalf of all of us as a podcast.

26:13But anyway, this is the way I feel. This is obviously great news. I think if this happens, as you say, it's going to make the product better in terms of what we're seeing on track. It's what everyone's kind of been demanding behind the scenes. It's what the drivers have been asking for. And so I do think it's great that the FIA and F1 are being so reactive and collaborative and trying to find a solution that works for everyone. So I think that what we're coming across potentially as like pessimistic is not necessarily the case. We're just trying to identify like what some of the knock on effect of making this decision at this point is going to be and what are some of the things we can preempt.

26:49We're going to see becoming challenges. Right. But overall, I think the overriding sentiment is that we all think that this is a great direction. Right. And I think it's so reassuring that everyone's being listened to. Yeah. For me, it's exciting because when you when you have a new set of regulations, everybody kind of finds their place within year one. And then the teams at the bottom are trying to catch up. And, you know, those gaps are starting to squash down again. But when you kind of change it in the way that they have and you're going to have to change the design of the cars in order to fit in a larger fuel tank, bigger cooling, all of that kind of stuff, you have another partial regulation reset.