Can Audi avoid Toyota’s mistakes in its Everest-sized F1 mission?

Audi is entering Formula 1 as a works team in 2026. This is not news – it was announced back in August 2022 – but it is worth simply re-stating as a fact because it is a big deal.

Audi is a premium brand of the Volkswagen Group, the world’s largest car company, which has never before competed in F1. It is doing so now because of changes made to the sport in recent years – particularly the introduction of budget caps on chassis and now engines, and the adoption of a new style of engine in 2026.

So Audi’s entry is a vote of confidence for F1 in both its recent growth and its future trajectory, and a huge development for a car company that has a storied history in motorsport, with successes ranging from Le Mans to rallying and the legendary Pikes Peak climb.

And yet it would be fair to say the project is not exactly perceived to be in the rudest health, and if you want a symbolic representation of that fact, look no further than this year’s driver market.

Audi signed Nico Hulkenberg early in the year, fitting its bill of a competitive, experienced, German driver. But its prime target for team leader was Carlos Sainz, who in February lost his seat at Ferrari from 2025 to Lewis Hamilton. 

Audi chased the Spaniard long and hard. Yet after months of prevarication, Sainz rejected Audi in favour of Williams, because he felt that was a better option for the next three years of his career.

As snubs go, that’s a big one. Sainz had hoped for a seat at Red Bull or Mercedes, which his performances since joining McLaren in 2019 and then Ferrari in 2021 justified.

Sainz's snub of Audi in favour of Williams was a telling hint that all was not well with the new project

Photo by: Steven Tee / Motorsport Images

But when those teams decided to go in other directions, he chose a private team going through a rebuilding process (and a difficult season that has left it ninth in the constructors’ championship) over the factory programme of a major car manufacturer for whom his father had won the 2024 Dakar Rally.

And Audi is not just any car manufacturer. It has won Le Mans 13 times – second behind only Porsche, also a VW Group brand.

VW dominated the world rally championship from 2013-16. It holds the record at Pikes Peak with its electric ID.R prototype. It won the Dakar Rally four times in a row from 2008-11. 

Seidl kept a low profile and Sauber – or Alfa Romeo as it was then known – finished ninth in the championship. It became known within F1 that Seidl felt he was fighting to get Audi to take F1 seriously enough, commit sufficient resource and move fast enough

And while this is Audi’s first foray into F1, its predecessor Auto Union won the European championship, forerunner of the world championship, in 1936, and ran Mercedes close in 1937 and ’38. It is associated with two of the greatest drivers of the era, Tazio Nuvolari and Bernd Rosemeyer.

Ball of confusion

On paper, then, and in terms of conventional F1 wisdom, Sainz’s choice appears a baffling one. But it becomes easier to understand when one looks more closely at developments since Audi announced its intention to enter F1 nearly two and a half years ago.

Since then, the project has been marked by confusing communications, disruption and no obvious progress. 

When the project was announced, Audi did not even say what its plan was, although everyone in F1 knew it was going to buy Sauber, as rival BMW had for its works effort from 2006, and become a team owner which built its own engines.

Since Audi's F1 launch in August 2022, it hasn't been clear who is leading the programme

Photo by: Mark Sutton / Motorsport Images

The project did not have a leader until December 2022, when Andreas Seidl left his role as McLaren team principal to become chief executive officer of Sauber, charged with preparing the ground for Audi’s entry. When he did, it soon became clear that the original plan had been for Seidl not to join until 2025. Had it not got Seidl early, who would have led the project until then?

And there was a convoluted share-transfer process, which left former Sauber owner Finn Rausing still the majority owner of the team for that first full season and therefore limited the investment that was needed to start turning the team around. At the time of writing, in late November 2024, Rausing still owns 25% of the shares.

Through 2023, Seidl kept a low profile and Sauber – or Alfa Romeo as it was then known – finished ninth in the championship. It became known within F1 that Seidl felt he was fighting to get Audi to take F1 seriously enough, commit sufficient resource and move fast enough. He realised how much work was needed to turn Sauber into a team worthy of sustaining the F1 entry of a global car company, but felt Audi itself did not, it was said.

Early in 2024, it was announced that Audi would take full control of the team earlier than expected – by the end of the year. But results got even worse, and now there were also rumours that the project to design the 2026 engine was not showing the same progress as the programmes of the existing companies in F1. And there was a growing split between Seidl and Oliver Hoffmann, the Audi board member responsible for Sauber.

It became clear one of them would have to go. In July, Audi sacked both, and announced that former Ferrari team boss Mattia Binotto had been hired as chief technical and operating officer, reporting to a new Audi board executive, Gernot Dollner. A week later, it emerged that Red Bull sporting director Jonathan Wheatley would join in 2025 as team principal.

This change, it emerged, had arisen from an internal review of the F1 programme.

Try something new

Dollner said at a news conference held by himself and Binotto at the Italian Grand Prix: “It was never questioned that F1 is a great motorsport platform, the pinnacle of motorsports. 

Seidl's time at the helm was short-lived as Audi re-evaluated its situation

Photo by: Andy Hone / Motorsport Images

“We just re-evaluated whether our set-up was the right one, and as you know we then came up to take over complete responsibilities for Sauber earlier than expected, and then a second step we now established a future-oriented management structure. It was more how to organise and how to move on.” 

At the same time, goals were reset. Back in 2022, the stated ambition was for Audi to be competing for the world title within three years. Now, that became five.

“We see our Formula 1 project as a long-term project,” Dollner said, “and after I joined Audi in September of last year, we did an evaluation and it ended up with the set-up we found and we maybe recalibrated our time path to a more realistic one. We are quite realistic when` it comes to timing.”

In combination with the use of fully sustainable renewable fuels, that makes the engine technology absolutely in line with the corporate strategy of Audi as a car company

Dollner has also re-emphasised Audi’s commitment to Formula 1. “Audi and F1 for me is a perfect fit,” he said. “The new rules perfectly fit our corporate strategy.”

The new rules are why Audi has decided finally to commit to F1, in two different ways. The budget cap on chassis and, from 2026, engines, means manufacturers no longer have to commit an effectively bottomless pit of money to success in F1. They can spend only as much as they are allowed – currently $135m on the car and $95m on the engine per year.

That’s attractive for two reasons – the plain financial aspect of it, but also the knowledge that they are competing on a level playing field. Because of the cap, F1 teams can now start to be seen as profitable businesses in themselves, on a purely bottom-line basis. Add in the value of the brand exposure from 24 live broadcasts a year, which manufacturers calculate to run into the billions, and the financial case is straightforward.

Audi's business plan to enter F1 remains sound

Photo by: Audi

Then there are the specifics of the rules themselves. From 2026, the hybrid part of the engine will be responsible for providing about 50% of the total power output. In combination with the use of fully sustainable renewable fuels, that makes the engine technology absolutely in line with the corporate strategy of Audi as a car company.

Within F1, questions have been raised about the new engines. The change has been expensive for the existing manufacturers, and required new aerodynamics rules, which include compromises – the need to recover sufficient energy to power the battery has led to the introduction of moveable aerodynamics to increase top speeds and therefore braking distances.

And there is the question of the wisdom of changing the rules as the field closes up, which likely results in a shuffle of the order and a more spread-out field, at least initially.

Corporation taxing

But on a big-picture level, it is hard to argue against the idea that the rules have been a success in one significant way already. Audi is not the only manufacturer attracted by them. Ford is also entering in 2026 in partnership with Red Bull. Honda had decided to pull out, only to reverse that decision because of the new engines. And General Motors has now committed to a new entry from 2026.

Without the new engine rules, none of that would be happening. Renault has just ended its F1 programme. Which would have left Mercedes and Ferrari as F1’s only engine suppliers. Although perhaps Renault’s engine programme would still exist if the rules had not changed.

But Audi is not in F1 for the exposure alone. It’s one thing knowing that a project will be profitable and fits with a company’s ethos. Audi wants and needs to win – not only, but not least, because one of its major market rivals will be a direct competitor on track, Mercedes.

Within F1, the appearance of a project with a troubled gestation is perceived to have only heightened the relevance of questions that were already there from the beginning – would Audi and VW approach F1 in the right way?

Can Audi learn from the mistakes that Toyota made back in the 2000s?

Photo by: Andre Vor / Sutton Images

The VW Group is a giant, successful company with its own way of doing things. Just as Toyota was – and Toyota’s F1 programme, which ran from 2002-9, is always held up as the prime example of how not to do F1.

Toyota is notorious for failing to win a race despite spending what is widely regarded as possibly the biggest budget ever in F1. It tried to form an F1 team out of the corporate structure. That inevitably led to bureaucracy and delays, when an F1 team needs to be nimble and reactive. Audi says it is fully aware of the pitfalls.

“We are absolutely independent in handling this project,” Dollner says. “With the new set-up, we also improved to make the F1 project fast and independent from any corporate process. 

"It’s not only climbing a big mountain, it’s climbing Everest. It will take several years. Our objective is by the end of the decade to fight for championships" Mattia Binotto

“We are totally aware it is necessary to keep this project away from corporate processes. Only when it comes to marketing and some design aspects and of course sponsorship we need the link. But otherwise the decisions have to be taken in Hinwil. That’s our first priority.”

Energy crisis

As for the conspicuous lack of progress at Sauber since Audi took over – it recently finished last in the championship, despite a small late-season rally with some upgrades that did finally improve the car – Binotto admits the way the programme has been run so far has had an effect.

“When Audi bought some shares and had the programme to become the full owner in the future,” Binotto says, “internally some plans have been done, some strategic plans have been discussed and established but not yet come to execution. So Sauber have been remaining in a limbo for a while. Second, certainly let’s say some of the focus and energies were put towards 2026, to try to make sure Audi was ready to start in 2026 and that took off some energy on the normal development path for 2024 and 2025.”

Binotto says Audi can fight for titles by the end of the decade

Photo by: Andy Hone / Motorsport Images

Binotto knows the size of the task ahead, calling it “enormous”, adding: “It’s not only climbing a big mountain, it’s climbing Everest. It will take several years. Our objective is by the end of the decade to fight for championships.” 

He adds: “I knew Sauber a bit before from my past experience supplying (Ferrari) engines and gearboxes for many years so I had already been here in Hinwil at the factory, so somehow I knew what I would have expected. 

“But when you are here and you start looking into the details, the more you look, the more you realise where you are and what are the main differences to what I knew before from Ferrari.

“Certainly the gap and the differences are many and the gap is big. As a matter of fact if you look at the classifications, we know the gap is big. It’s big because of dimensions, because of the number of people, because of mindset, because of tools, facilities. Whatever you look around at, it is really comparing a small team to a top team.

“Certainly we are today all aware what is the task and how much it will take to get to the top. Normally it takes many years for a top team already to turn into a winning cycle. For us, we need as well to climb the mountain.”

The immediate task, he says, is to “create foundations, create the culture, create the mindset, and in parallel putting in place all the tools that are required to do a great car.”

Even since the restructure of the F1 project, Audi has faced questions. In November, the wider Audi car company reported a 91% slump in earnings on the back of Chinese sales collapsing, amid a 42% drop in profits for VW. 

Audi has secured funding from Qatar for a slice of the F1 team

Photo by: Audi

Audi is reported to be considering plant closures and has tabled a 10% pay cut. But it insists the F1 programme is “not in question”.

Before the Qatar Grand Prix, it was announced that the Gulf state’s sovereign investment arm – which is the third largest shareholder in Audi – would take a minority stake in the team. This is not a reaction to the sales figures, but it does take the pressure off the F1 project by ensuring the financial liability is not all held by Audi itself.

Binotto says: “We are in F1 until we win and next after. It is a long-term commitment. We have joined F1 to be here and stay here. 

“We intend to become a winning team and to set the benchmark and to stay then. It is not a joining and leaving. F1 is the pinnacle of the motorsport. It is great Audi is part of it finally and they are simply committed to stay.”

Can Audi make its F1 venture at success?

Photo by: Audi Communications Motorsport