Why McLaren’s surprise electric path can benefit everyone involved

McLaren’s resistance to building a road-going SUV has been as committed as Edna Mode’s dismissal of designing a superhero suit with a cape. It’s been a steadfast “no” for some time.

Chief executive officer Mike Flewitt, executive programme director Darren Goddard and Automotive North America president Tony Joseph have all vehemently kiboshed the idea.

That’s why news that McLaren Racing will enter the second season of Extreme E starting in 2022 comes as a genuine surprise. It hadn’t been part of the rumour mill.

Although McLaren Racing boss Zak Brown turned up in AlUla, Saudi Arabia for the maiden series event in April, it didn’t raise suspicion. He was wearing his United Autosports attire, in keeping with his race team’s partnership with Andretti Autosport in the championship.

An aside, Brown has likened himself to being a “silent partner” in the Andretti Autosport tie-up and said for 2022 he would “continue letting them do what they do” so the arrival of one party needn’t dictate the exit of another.

On United Autosports he remarked: “For me personally, it's my relaxation. It's my golf at a race weekend if I'm not doing my day job. I'm 100% McLaren when it comes to racing.” Back to the matter at hand.

Catie Munnings, Timmy Hansen, Andretti United Extreme E

Photo by: Sam Bloxham / Motorsport Images

So, while McLaren has maintained its anti-SUV stance, why has its Racing arm pledged its allegiance to the most high-profile arena in motorsport for these kinds of vehicles?

Brown says: "I wouldn't want to speak on their [Automotive] behalf because it's not my job.

“What I would say is this is a McLaren Racing effort solely. Of course, electrification is very important to the Automotive Group. This is a racing-driven decision in for what we think McLaren Racing need to do moving forward. It's not an indication one way or the other as to Automotive's position on SUVs.”

McLaren went through the financial wringer in 2020 as a result of the economic fallout from the global health crisis. It sought a £150 million loan from the National Bank of Bahrain and sold a cool £185m stake in its Formula 1 team to US consortium MSP Sport Capital.

"We are financially very healthy, which is allowing our competitiveness in Formula 1, has allowed us to look at IndyCar, that's allowed us to enter into Extreme E" Zak Brown

These injections of liquidity have helped balanced the books, allowing it to pursue another motorsport programme in addition to F1 and IndyCar. And comparatively, Extreme E is a cheap way to do it.

Autosport understands the lease deal per standardised Odyssey 21 E-SUV is in the region of €1.2m. The powertrain technology won’t be opened up until 2023 at the earliest, keeping a cap on development spending. And despite an increase for the second event in Senegal to manage workload for teams, personnel passes are capped at 10 per squad to limit logistics.

Brown’s cheque will be in the region of seven figures rather than the eight he’d need to cash should McLaren Racing take up its option to join Formula E in 2022-23 for the Gen3 rules.

Sara Price, Kyle Leduc, Chip Ganassi Racing Laia Sanz, Carlos Sainz, Sainz XE Team and Catie Munnings, Timmy Hansen, Andretti United Extreme E

Photo by: Andrew Ferraro / Motorsport Images

Speaking to select media including Autosport, Brown continued: “100% our financial situation at McLaren Racing is extremely strong. Of course, we have to be very diligent and get a return on investment anywhere we're spending money, whether that's entering a new racing series or funding a new windtunnel.

“But yes, we are financially very healthy, which is allowing our competitiveness in Formula 1, has allowed us to look at IndyCar, that's allowed us to enter into Extreme E.

“The way Alejandro [Agag, Extreme E co-founder] has set up the championship with the way you transport the vehicles and limited size of the teams… you know we have a filter if you like, when we look at new racing series. It has to be commercially viable. Extreme E ticked every single one of those boxes.”

Recent experience will allow McLaren Racing not to repeat the mistakes of the past - namely its ill-fated independent attempt with Fernando Alonso to qualify for the 2019 Indianapolis 500.

With the hires for the Extreme E concern set to come from “outside the Formula 1 programme”, Brown explains: “certainly, we can't get ourselves in a situation which I got us into in 2019 where I think I did bite off a little bit more than I could chew, and we saw the result in Indianapolis.

“As I tell everyone at the factory, mistakes are ‘OK’. Just don't make the same one twice,” he said.

“I'm certainly going to be very cautious and deliberate when adding to the McLaren Racing portfolio that it's something I feel we can digest and do properly.”

In both the official announcement of McLaren Racing’s foray into Extreme E and in the corresponding virtual press conference, a couple of key phrases kept coming up. Involvement in the championship would boost the team’s “sustainability and diversity agenda” while engaging new “fans and partners” to grow the “brand and franchise”.

Fernando Alonso, McLaren Racing Chevrolet

Photo by: Michael L. Levitt / Motorsport Images

In many ways, Extreme E, despite being only two events old, is ready-made to fulfil those criteria for Woking thanks to its three core elements. Electric motorsport, shipping the bulk of the cargo aboard the refitted and now more efficient RMS St. Helena ‘floating paddock’ plus the installing of ‘Legacy Projects’ at each of the five race locations visited per season.

These fulfil the sustainability credentials McLaren is after. The rules mandating each teams runs a male and female driver would appear to fit the desire for improved “diversity”.

Insight: Why Extreme E's equality stance is necessary

Then there’s the fan engagement, with Extreme E broadcast in the UK alone on Sky Sports, BT Sport, ITV1 and via BBC Online platforms. These contributed towards an 18.7m-strong audience for the first round in Saudi Arabia, with Agag telling Autosport "for sure, we don't charge much” to land deals with some of the biggest networks around the globe to get as many eyes as possible on his brainchild.

Then there’s what Extreme E can offer McLaren Racing as a commercial platform. Just Marketing founder Brown’s bread and butter lies with establishing sponsor deals and is a part of the reason why he earned his papaya gig.

Discounting all contracts agreed before the series made its debut, since its first event in Saudi Arabia the championship has sorted a partnership with a sunglasses firm and a luggage company in addition to signing no fewer than 12 additional broadcast deals.

Andretti United turned up in Senegal with a brand-new livery, Rosberg X Racing donned new stickers, as did Veloce Racing as brands picked up the phone and wanted to be associated with Extreme E.

Combined with Agag telling Autosport that his investors will see a return on their money in time for season two and the commercial buzz around Extreme E is clear. McLaren Racing can tap into that and helps explain its timely signature.

First position, Molly Taylor, Johan Kristoffersson, Rosberg X Racing , 2nd position, Jamie Chadwick, Stephane Sarrazin, Veloce Racing , 3rd position, Mikaela Ahlin-Kottulinsky, Kevin Hansen, JBXE Extreme-E Team and Nico Rosberg, founder and CEO, Rosberg X Racing Ocean Prix podium

Photo by: Sam Bloxham / Motorsport Images

The championship, with McLaren’s registration, now boasts 10 teams. But the RMS St. Helena and its two cargo holds impose a limit of 12 entries with the space required to load up and send the containers across each sea and ocean. To secure a slice of the pie, any prospective team needs to act fast to secure its place. That’s what McLaren has done.

As Brown explains: “Why Extreme E? I believe the franchise will be sold out quickly. We felt with the success of the series that we didn't have the luxury of maybe waiting another six months.”

"The news of McLaren entering Extreme E are going to for sure help other manufacturers look at Extreme E with interest" Alejandro Agag

Then there’s what McLaren Racing and its burgeoning entry brings to Extreme E itself.

Incidentally, news of McLaren Racing’s interest in electric racing has come to the rescue twice now. When so many questions were raised about the health of Formula E following the successive announcements that Audi and BMW will quit the championship at the end of the 2021 season, McLaren steadied the ship when in January it signed a Gen3 option that guarantees it a place on the grid should it decide to go ahead and commit.

Then, only four hours after the Extreme E commitment from Woking, news that both the Brazil and season-ending Argentina X-Prix events had been cancelled amid the ongoing COVID crisis in South America didn’t come across as the calendar body blows they might otherwise have been seen to be.

Agag understands public perception and works as hard an anyone to ensure good coverage of his championships, and McLaren Racing’s arrival is a massive tick on both fronts.

He says: “The McLaren news today is a major, major boost for Extreme E. For us to have a team like McLaren, the competitive heritage, is incredible for Extreme E. The news today is probably the biggest news in the short history of Extreme E.”

Zak Brown, McLaren Racing CEO and Alejandro Agag

Photo by: McLaren

As for those now two remaining slots to sell out his franchise, Agag continues: “We know that there are many manufacturers looking at Extreme E. The news of McLaren entering Extreme E are going to for sure help other manufacturers look at Extreme E with interest.

“I'm sure that there will be some car manufacturers looking at the news today with big interest… so we may have two other teams joining soon. We will wait because this news is big enough to give us the momentum.”

Molly Taylor, Johan Kristoffersson, Rosberg X Racing, and Cristina Gutierrez, Sebastien Loeb, X44, race and collide into the first corner of the final

Photo by: Charly Lopez / Motorsport Images