Why Volkswagen's rivals want guarantees on 2026 F1 engine plans

The series is clearly on a high, with new races being added and many circuits reporting sellout crowds, while there has been an influx of sponsors, especially from the tech industry.

The consensus is that two new manufacturers can only add to that growth.

"I think we are very happy for Porsche and Audi to join F1, it is great for the sport," says Ferrari team principal Mattia Binotto.

"And it's great as well for us to compete with such brands. Overall, I think it is good news, with which we need to be very happy."

"It's great if the Volkswagen Group joins F1," agrees Mercedes boss Toto Wolff. "Fantastic brand, it increases the credibility of what we do. And they are racers. But as far as I understand, there is no firm commitment yet.

"They've been sitting on the table for the regulations, but [while] that commitment isn't actually confirmed, we can't really know what the plans are."

Indeed, VW has made it clear that its involvement is subject to the final regulations. And in the background a debate is ongoing regarding the concessions available to new entrants, and how they will be managed.

Those concessions are a key part of the Volkswagen plan. Understandably, it has been reluctant to enter F1 and compete with the established marques without some form of help to balance out the years of experience that the others have accumulated.

That's why VW has waited for the significant changes to the technical spec that are coming in 2026, notably the removal of the MGU-H. While there is some carry over of technology a new engine formula creates a reset, and thus a fresh start, for everyone.

Volkswagen logo

Photo by: Volkswagen Motorsport

In addition, as an extension of the series' cost-cutting measures, the manufacturers will have to operate within a power unit budget cap, and also comply with restrictions on dynamometer time, similar to those currently in force on aerodynamic testing.

Crucially, within those rules new entrants will be allowed to spend more on development and utilise more dyno hours in order to help them to close the gap to the established engine suppliers.

The VW plan has not yet been officially confirmed, but it's clear that Porsche and Audi intend to develop independent engine projects. Porsche's will be run in conjunction with Red Bull Powertrains, while Audi's will be focussed on its base at Neckarsulm in Germany, from where its successful WEC hybrid programme was managed.

Rivals have two main concerns. Firstly, exactly what constitutes a new entrant? The fear is that the RBP/Porsche project could have its roots in the IP of the current Honda power unit, giving the Stuttgart marque a head start that calls into question its position as a newcomer.

Competitors also want assurances that the Porsche and Audi projects really are independent, and that there will be no crossover or sharing of scarce R&D resources that will benefit both, and flout the aforementioned restrictions.

"I think that it's not clear yet who actually enters as a power unit supplier," says Wolff.

"And who declares themselves as newcomers. It could well be that there are three companies from the same group that are entering as newcomers. How can I say? The picture is still very unclear."

In theory, the details of what is and isn't allowed have to be sorted out in the next couple of months.

"On the regulations themselves, we know that the objective is try to finalise them by June and then voted by June," says Binotto.

"All the discussion we had at the time, and that we are still having right now, [are] still considering the fact that Porsche and Audi could have joined, so it's not something new in that respect.

"And there are no, let me say, new discussions related to that. But there are still open points overall. There are open points which are on financial regulations, because they need to be finalised and formalised.

"What is a newcomer, and how do we define newcomer? What are the benefits of a newcomer? All that needs to be somehow clarified and defined. On top of that is all the IP transfer, because IP transfer should not be possible.

"That was agreed. On how do we translate that into a wording, difficult to know. There are points on the technical side that are still open discussions. So there are many things that need to be moved forward and finalised, and from now to June time is certainly very short, which means that we need to work on it as a high priority."

Mattia Binotto, Team Principal, Ferrari

Photo by: Ferrari

Alpine Cars CEO Laurent Rossi shares similar sentiments. He welcomes the competition, but wants some guarantees regarding how it will work.

"I think it's nice, I think is good for the sport," he says of VW's planned entry. "But we need to really pay attention to a couple of things, actually. We need to check and make sure that two separate teams are two separate teams. You know where I'm going here?

"We need to make sure that if they're entering the arena as teams, are they works teams, is it coming from Porsche, from Audi, is it coming from Red Bull or Honda? Do they have specific treatment or not? So basically, is the sport going to be better off, or is it going to be worse off?"

Rossi is adamant that newcomers shouldn't receive too many benefits at the expense of those who have supported F1 through the decades.

"Suddenly to favour new entrants, and then incumbents suddenly get a bit of the wrong end of the stick?," he asks.

"And I guess it's the same concern for most teams here, but especially for us as a works team, because we've invested literally billions over the past 20 years, 40 years, for Renault in PUs.

"It's not for someone to come in and just like get the lion's share just because they roll out the red carpet. Because it's basically disrupting our business model, and putting a lot of jobs at risk."

Red Bull's Christian Horner can't yet confirm any future Porsche deal, although rivals are convinced that it's already been agreed in principle.

However, his team is committed to running a product of Red Bull Powertrains in 2026, whatever name is on the cam covers, and as such Horner is at the forefront of the push for concessions.

"I think the framework that actually exists within the power unit regulations is reasonable from a newcomer status perspective," he says. "Which obviously Red Bull Powertrains will be for 2026."

Horner outlines the financial concessions that new entrants will receive in 2023-'25 as they develop their new power units.

"I think there's $10 million in the first two years and $5 million in the third year as an allowance for a newcomer.

Christian Horner, Team Principal, Red Bull Racing

Photo by: Red Bull Content Pool

"I think the thing that is the most restrictive, that needs to be looked at is, from a CapEx perspective because essentially, there's only $15 million worth of capital expenditure allowed on equipment as from when the cap comes in."

Horner's argument is that while Red Bull is flat out on equipping its new powertrains facility with dynos and so on, that task won't necessarily be complete by the start of next year. At which point there will be restrictions on how much can be invested in new machinery.

"Now, when you look at our competitors, that in some cases have obviously had 70 years of investment on the engine side, to think that you can have a facility fully operational and equipped within the next nine months or eight months is unrealistic. So I think that's something that needs to be looked at."

Wolff, meanwhile, says that number is just part of the story.

"Whether $15m CapEx is enough or not enough, there are much bigger topics that we need to agree on which we haven't."

The question of Honda's IP finding its way into the Porsche programme remains at the forefront.

That may help to explain Red Bull's decision to switch from the original plan of building the current engine in Milton Keynes with Honda parts in 2023-25, and instead continuing to source complete units direct from Japan.

By so doing there is a clearer separation between the old and new projects, and it also helps to preserve RBP's claim to be a new entrant.

While the big picture discussions continue behind the scenes, Red Bull is gradually putting the pieces of its new division together. By any standards, it's an ambitious undertaking.

"As far as our own preparation, we are on target," says Horner. "We will move into our new facility in May, and the first Red Bull engine will run on the dyno by the end of the year. So they're making great progress.

"It's exciting times, it's a super exciting project. We've attracted some phenomenal talent from all corners of industry and, yeah, it's a new chapter. But 2026, whilst it seems a long way away, it's actually a lot closer than you think."