Why Honda's F1 exit will not force F1 hybrid U-turn

Amid the immediate fallout of Honda's bombshell announcement that it was quitting Formula 1, it was all too easy to jump to the conclusion that this was a huge blow to grand prix racing's green credentials.

After all, the justifications for the Japanese manufacturer not wishing to continue its F1 journey were all linked to environmentally friendly considerations: the push for the road car company to be fully carbon neutral by 2050, and to have two-thirds of its sales as electric vehicles by 2030.

Honda's decision to walk was interpreted by some as a clear slight to F1, in that grand prix racing's hybrid push, and bid for carbon neutrality, were not enough to keep the marque happy.

But dig a little deeper into what Honda actually said, and the apparent reasons are not so directly linked to F1's rules or where the series goes from here. If anything, this was a company-specific problem that starts and ends in Tokyo.

Honda has quit because it needs to throw all its money at its carbon neutral push and it wants the engineers, who have learned a great deal about hybrid technology, to be focusing on automotive ambitions rather than chasing lap time. Ultimately, this is more about the need for Honda to divert resources than F1 going in the wrong direction.

However, as the only manufacturer in the sport that was an engine supplier rather than team owner, it was always an outlier.

While the new Concorde Agreement's commercial terms (plus budget cap) have left the series a virtual no-brainer for works outfits Mercedes, Renault and Ferrari to commit as teams are now profit centres, for Honda there was ultimately no means to better balance the books.

Honda's choice therefore was pretty simple if money needed to be diverted to the road car operation: buy a team (which now costs at least $200 million because of the dilution fund), or pull the plug.

PLUS: Why Honda's latest F1 exit means it may never come back

Given that this is Honda's internal problem rather than a problem that relates to the other manufacturers, that means there is little panic within the offices of F1 or governing body the FIA over where we go from here. Indeed, it was fascinating to see this week Mercedes CEO Ola Kallenius talk a great deal about how Daimler plans to enhance the links and technology transfer between its F1 project and its AMG road car division from next year. The tie-ups will extend well beyond the Project One vehicle that features an actual F1 engine.

"We will use the technology development in Formula 1 for performance hybrids and going into other exciting technologies in the future, and put that into our AMG cars," he said during an investors' briefing about Mercedes' strategy plan as it moves to more electrification.

"With Project One, we're taking the Formula 1 powertrain and putting it on the road. So it just comes natural to us to leverage Formula 1 even more for AMG going forward."

F1's place is ultimately not about trying to react to the wants and demands of what the automotive manufacturers want today. It is about being at the cutting edge and leading the technology charge for where things are going to be in a decade

F1 continues to work for brands like Mercedes, and the series has certainly not been sitting back when it comes to enhancing its focus on areas that automotive manufacturers want to see.

The series remains fully committed to a carbon neutral target by 2030. Before then, and by the start of 2022 at the latest, the aim is to have 10% advanced sustainable fuels, with this percentage increasing over time so that by 2030 at the latest fuels are 100% sustainable.

New engine regulations coming for 2026 are aimed at even more efficiency than now, and built around using a higher level of sustainable fuel - potentially with that 100% target being pulled forward if it is possible. What is clear is that there will not be a radical departure from the hybrid engine concept that F1 has right now, nor any toying in trying to go fully electric. It's also too early to go full-on hydrogen power.

The balance between the efficiencies of the right-size ICE, and incorporating it with electrical power either through kinetic energy or heat, still appear to be more relevant to car makers in the next decade than having them focusing only on exclusive battery-powered vehicles.

F1's place is ultimately not about trying to react to the wants and demands of what the automotive manufacturers want today. It is about being at the cutting edge and leading the technology charge into where things are expected to be in a decade.

Speaking to F1 managing director of motorsport Ross Brawn earlier this year, he was clear going down avenues like sustainable fuels could achieve some great things and allow the series to be crusaders.

"We believe F1 can become the driving force," he said. "With the second generation bio-content of fuel going up and with the new engine [from 2026], we can say, 'right, it has to run on sustainable or synthetic fuels and that's the only way you can compete in F1.'

"You can be sure that that will then drive that technology. And all the oil companies will be involved with that because they know they've got to find alternative streams in the future. So we can be the catalyst behind changing these things. So there's the technology which we can definitely be engaged with."

F1 technology transfer and road car relevance go beyond just engines and batteries too. Last month, when new Renault CEO Luca de Meo spoke about his vision for the future, he said there were plenty of downstream benefits from being involved in F1.

PLUS: Why Renault's new 'car guy' CEO couldn't pull plug on F1

Already, Renault is beginning to make advances on its road cars using its E-tech brand, which has been transferred from its F1 hybrid understanding.

"I think in the future, also when it comes to electrification of engines, aerodynamics will be very, very important for the electric car," said de Meo. "Aerodynamics will be a fundamental for electric cars. Plus the battery management, a high-end battery management. I think F1 can do a lot of things."

It would be a huge mistake to believe the only way for F1 to prove its green commitment in the future is to go fully electric. And that's ignoring the inconvenient truth that, right now, battery technology cannot produce a racing car that can go at 200mph for two hours.

Electric road cars are talked up a lot, but their price and limited range mean they are still of very limited attraction to consumers outside the more premium end of the market. With 1.1 billion cars on the world's roads, one billion of them have internal combustion engines. So it is still a tiny minority that are electric.

And let's not forget industry experts suggest for an electric car to end up being totally carbon neutral and set off the impact of its battery creation, it needs to cover at least 100,000 miles. Plus, there is not yet a completely green way of disposing of batteries once they are past their useful life.

A carbon neutral F1, with ultra powerful hybrid engines running on next generation sustainable fuels with cutting edge battery technology sounds as good for fans as it does for manufacturers

Despite an obsession from many about electric cars (especially from governments forcing manufacturers to go down this route), they are not a silver bullet solution to saving the climate. In fact, if F1 can help change the world's fuels and fast track sustainable products that cut pollution by just a few percent, then that across one billion cars would have far greater impact for the environment than anything achieved with batteries.

This is not to say the current F1 turbo hybrids are perfect, far from it in fact. The lack of noise has been an important factor for fans. The MGU-K and MGU-H have proved to be hugely complex and expensive to get on top of. Plus, perhaps worst of all, F1 and the manufacturers involved have not been on the front foot in marketing them well nor getting the message of their brilliance out.

Very few people outside of the series are aware F1 cars currently race with the most efficient and the most powerful vehicle engines in the world today. But these are all aspects that can be readily addressed for 2026.

Make F1's hybrid engines cheaper by introducing a power unit budget cap; get rid of some of the complicated systems that have proved to be surplus to requirements, make the engines louder, keep them as powerful, and continue to be the leader of innovative sustainable fuel development.

Then make sure you shout from the rooftops about how brilliant these power units are. F1 has no need to throw the baby out with the bathwater. A carbon-neutral F1, with ultra powerful hybrid engines running on next generation sustainable fuels with cutting edge battery technology sounds as good for fans as it does for manufacturers.

And that, irrespective of what Honda has chosen to do, is exactly where F1 is heading.