Honda's decision to leave Formula One at the end of 2021 poses big questions for Red Bull and for the sport as a whole.
First and foremost, two teams, Red Bull and Alpha Tauri, need to find a new engine supplier by this time next year. The sport has rules in place to ensure no team is left without a power unit in its cars, but based on the current contracts in F1, that would pair Red Bull with its former engine partner, Renault.
That relationship did not end well back in 2018, and neither side has shown a desire to bury the hatchet. What's more, Red Bull -- the only team capable of challenging the dominant Mercedes outfit this year -- would go from being a works team with Honda engines to a customer team with Renault, presenting a significant setback in its progress.
But Honda's decision also raises bigger questions about the involvement of car manufacturers in F1. For right or wrong, government legislation around the world is pushing the motor industry towards electrification and F1, with its V6 turbo-hybrid engines in place until 2025, is looking increasingly out of step.
Although Ferrari, Mercedes and Renault remain committed to the sport under a new Concorde Agreement until the end of 2025, Honda's decision represents a serious wake-up call for F1.
Why is Honda leaving?
In Friday's statement, Honda was very clear that its decision to leave Formula One was based on its desire to focus more resources on zero-emissions technology.
The company is determined to become carbon neutral by 2050, and to do that it has set a preliminary goal of making two-thirds of its automotive products electric by 2030. Despite developing electric vehicle technology since the late 1980s, Honda has fallen behind in its production of full EVs compared with many of its competitors, and while it has invested heavily in hybrid and hydrogen fuel-cell technology in recent years, it only recently added a full EV city car to its range.
Unlike the manufacturers that use F1 as a marketing exercise, Honda has always approached the sport primarily as an R&D platform. It claims its F1 project has helped in the development of its hybrid and battery technology in recent years, but as its emissions targets for 2030 and 2050 loom larger, the R&D resources dedicated to F1 are no longer seeing the return in the right kind of technology.
"For over 10 years we have been doing initiatives to reduce CO2, however, the auto industry is going through a once-in-a-hundred years transformation," Takahiro Hachigo, president of Honda Motor Co, said in a news conference on Friday. "There is a high level of interest around the world, and the speed to get to CO2 reduction is getting more and more important.
"We definitely have to accelerate the carbon-neutrality path, so we have to enhance our energy management tech and fuel technology that we have built over the years with F1 and engineer resources to direct them towards environmental efforts. That is why we have reached this [decision] now."
Unlike F1's 10 teams, which are now signed up to the sport until 2025 under the new Concorde Agreement, Honda's position as an engine supplier meant it was never contractually bound to F1. It was free to determine its own contracts with its teams and had no obligation beyond those agreements to remain in F1.
The early warning signs came in 2019 when it agreed to only a single year contract extension with Red Bull, pushing its commitment to F1 from the end of 2020 to the end of 2021. Questions over its long-term plans were often raised in media sessions but were never answered by the Honda representatives in the paddock or by Red Bull.
In August this year, Red Bull was informed by Honda that the board in Tokyo was seriously assessing its options beyond 2021 and by late September the F1 team received confirmation its engine partner would not be renewing its contract. The Japanese manufacturer remains committed to developing its engine over the winter for its final season in F1 next year, but it could be the last time we see the Honda name in F1 for several decades.
"We want to aim carbon neutrality by 2050, so that's what we want to put our resources into and I am not thinking about re-participating in Formula One," Hachigo added. "But racing is in Honda's DNA, so for the other races Honda is participating in currently, we will continue in that with the passion we currently have for those races."
What next for Red Bull?
The only positive news from Friday's announcement is that Red Bull is not planning to follow Honda out the door. The company's recent signature on the next Concorde Agreement means both Red Bull and Alpha Tauri are committed to the F1 grid until at least 2025, and the team reconfirmed that commitment on Friday.
Nevertheless, the Honda news is a significant setback for one of the biggest names in the sport.
The turbo-hybrid era has not been kind to Red Bull. After winning four straight world championships between 2010 and 2013 with V8 Renault engines, the switch to the turbo hybrids in 2014 saw the reigning champions struggle as the French manufacturer produced a dud of an engine. The relationship between Red Bull and Renault deteriorated along with the results and nearly resulted in a split in 2016 before finally coming to an end in 2018.
Meanwhile, Honda made its return to the sport with McLaren in 2015 but was also tripped up by F1's complex engine regulations and performances failed to meet expectations. Honda came close to quitting at the end of 2017, but Red Bull's junior team, Toro Rosso, offered an F1 lifeline for the 2018 season. The partnership worked for both teams, and when Red Bull finally cut its ties with Renault at the end of 2018, it also switched to Honda power and won three races in the first year of that partnership in 2019.
But the success in the past two years only makes Honda's decision to withdraw at the end of next season all the more crushing for Red Bull. After suffering with Renault for so long, it had finally found an engine partner that it was willing to work with and, although the overall package was still short of this year's runaway leaders Mercedes, Red Bull felt as though it was making progress. Yet as of 2022 it seems Red Bull will be back at square one.
Honda's exit will leave F1 with the same three engine manufacturers it had at the start of the turbo-hybrid era in 2014: Mercedes, Ferrari and Renault. Red Bull would no doubt love to receive a supply of Mercedes engines from 2022 onwards, but back in 2015 an engine supply deal fell through for the next year when Mercedes ultimately decided it was not in its best interests to supply one of its main rivals. What's more, the world champions can easily point to the fact that it will supply three other teams from 2021 onwards -- Aston Martin, Williams and McLaren -- and simply say its order book is full.
That leaves Ferrari and Renault. Ferrari supplied Red Bull with engines in 2005 and was Toro Rosso's engine suppler from 2006 to 2013. However, after a series of rule clarifications over the winter, the Ferrari power unit has become the worst of the bunch and there are no guarantees of a quick fix in time for 2022. On top of that, Ferrari already supplies Alfa Romeo and Haas and might not see a benefit in supplying a team that has the resources to beat it on track.
Which brings Red Bull back to Renault. Anybody who has followed Formula One in the past five years will be aware of the fractious relationship between the two, and in normal circumstances there is no way they would reunite just three years after their split. But if Red Bull is unable to agree a contract elsewhere, the sport's governing body, the FIA, has the power to force a marriage of inconvenience.
To ensure no team is left without an engine supply deal in F1, Appendix 9 of the sporting regulations states that "teams without a supply agreement shall be allocated to the Power Unit Manufacturer that supplies the lowest number of teams". As Renault will be supplying only its own team from 2021 onward after losing McLaren to Mercedes, Red Bull would be automatically designated as a Renault customer if it relies on Appendix 9.
In theory a new engine manufacturer could join F1, but for all the reasons listed above about Honda's decision, it's hard to picture a major manufacturer dedicating the resources needed to develop an F1-specific V6 turbo hybrid. Honda struggled massively when it returned to F1 in 2015, blaming a lack of preparation time for its issues, so it's very unlikely another manufacturer would be able to produce a competitive engine by 2022. What's more, with F1's engine formula up for review in 2025, the significant investment would be good for only four years.
Red Bull has until Aug. 1, 2021, to put in a request for a default power unit supply to the FIA, giving it less than a year to negotiate its position before its seemingly inevitable return to Renault. But while it might be painful to accept, it's in Red Bull's interest to make a decision sooner rather than later so it can start to prepare for the major regulation changes coming in 2022.
Although cost saving measures have put aerodynamic work on the 2022 cars on hold until next year, work on other aspects of the car, such as cooling, the suspension and the gearbox, is allowed. The more work that can be completed and signed off this year, the more flexibility teams will have to focus on the all-important 2022 aero development under the incoming budget cap for 2021.
But without knowing which engine will be in the car, a lot of that work will be far more difficult for Red Bull compared with its main big-spending rivals Mercedes and Ferrari. So, at a time when Red Bull was already struggling to keep up with Mercedes, it is now facing even more hurdles ahead of the biggest regulation change of the next five years.
It also raises questions over Max Verstappen's long-term commitment to the team. He currently has a contract until 2023, but comments made by Red Bull adviser Helmut Marko earlier this year suggested an exit clause would be available to Verstappen at the end of 2021 in the event that Honda opted not to renew. If Red Bull can sign a new engine deal and convince its star driver that it is still the best place to race in 2022, that won't matter. But with so much potential upheaval in 2022 with the new regulations, it would be surprising if he didn't consider his options.
What does it mean for F1?
There's a lot of hope that the 2022 rules package will provide F1 with a quick fix for its lack of competition, but reality is that the team best placed to challenge Mercedes has now suffered a considerable setback. It's possible someone will find a magic bullet in the new regulations and emerges with the fastest car in 2022, but if Mercedes' dominance has taught us anything, it's that stability is the best guarantee of success in modern F1.
Then there is a wider question about manufacturer interest in F1. The futures of Mercedes and Renault have also been the subject of speculation over the past 12 months, and although both insist they are committed to the sport, there are very good reasons why those questions have been asked.
For all its marketing value as the pinnacle of motorsport, F1 is increasingly at odds with the long-term goals of the wider motor industry and its push towards electrification. The current engines are remarkable pieces of engineering, and if a similar level of efficiency could be found in road cars, the world would be a better place. However, government legislation in a number of key markets is aimed at phasing out petrol cars (even of the hybrid variety) in the coming decades, leaving car manufacturers with no choice but to invest in other forms of powertrain.
Formula E has the exclusive rights to remain as the FIA's sole electric single-seater series until 2039, so that avenue appears to be closed to F1. But in many respects it doesn't matter as the current level of battery and EV technology would not allow for the performance levels or race distances F1 fans are used to. To continue to enjoy F1 as we know it over the coming years, the series has to stick with some form of fossil-fuel powered cars until EV technology is close enough to adopt.
It makes F1's next set of engine regulations in 2025 all the more critical to the future of the sport. To find a set of regulations that appeal to manufacturers without being prohibitively expensive will be a tough balancing act. Or the sport could choose to abandon the pursuit of cutting-edge technology and manufacturer money by simplifying the regulations to allow independents, such as Cosworth, to return. Either way, big decisions need to be made.
Ultimately, Honda's announcement is another indication that the fastest sport on earth is being left behind by the pace of a rapidly changing world.