What Formula E must do for McLaren to act on its attraction

After a punishing end to 2020, Formula E needed a shot in the arm to kick off the new year. Within 48 hours of one another as November turned into December, Audi then BMW went public with their decision to pull the plug on their championship programmes at the end of the inbound 2021 season.

The good news stories of late last year - namely Mahindra Racing becoming the first team to sign on for the Gen3 regulations and a final day of pre-season testing in which all 24 cars were split by less than 0.8 seconds - were thrust into the shadows.

PLUS: Why BMW and Audi have pulled the plug on Formula E

As the saying goes, bad things came in three. While many readied Christmas out of office messages, FE announced the latest calendar disruption. The two races in Santiago that were set to raise the curtain on the new campaign - the first with FIA World Championship status - were postponed following the recent detection of a rapidly spreading variant of COVID in the UK, and a subsequent travel ban into Chile.

Confirmation last week that the two Saudi Arabia night races will go ahead as planned across 26-27 February - communicated via a 24-word tweet and a smattering of emojis - wasn't much of a boost. It was more a case of things not getting any worse for FE.

But 42 days after Audi delivered the first in a sequence of bruising hits, the injection of confidence to FE has now been administered by McLaren Racing, signing an agreement that gives it the option to join the grid for the arrival of Gen3 rules package in 2022. The critical word is 'option'. The papaya-coloured welcome banners are some way off yet.

There is precedent for the deal McLaren has. In October 2016, Mercedes formed a similar agreement with FE, which - following a season of the HWA Racelab concern - did indeed pave the way for the German manufacturer to join the fold last season.

However, rather than 'option' preceding a definite race team as far as McLaren is concerned, 'option' instead precedes an evaluation of FE. For now, the news should be seen as a formal follow-up to Zak Brown's words at the Abu Dhabi Grand Prix.

The chief executive of the eight-time Formula 1 constructors' champion then said: "With the new generation car coming in 2023, and us no longer being the exclusive battery supplier, that's a racing series that we find very interesting. That's something that we are starting to look at more closely.

"[It is] the same criteria that we have on IndyCar: do we think we can be competitive? Do we think it's commercially and fiscally sustainable? Do we think it fits our brand?" he said in deference to FE and a possible return to the World Endurance Championship stage in the nascent LMDh category.

It's the same sentiment stressed by FE boss Jamie Reigle. Speaking exclusively to Autosport, he says of the McLaren announcement: "[Brown] talked about their interest in doing an evaluation in all sorts of motorsport. They're going to look at Formula E as part of that.

"Aiming at reducing costs, financial regulations, which aren't agreed yet, it's probably on my top one or two priorities in terms of things I'm working on with the teams and the FIA - and the commercial model that we've agreed for Gen3" Jamie Reigle

"We agreed to basically formalise that from a contractual perspective. It's very similar to Mercedes, where they said 'OK, we have an option to enter'. McLaren are going to do some work and evaluation on that over the coming months and then make a decision.

"It's not done yet; they haven't signed up to the regs. To be 100% clear, we're not at that point, but from our perspective, we're super excited to have them in the pipeline. It's a vote of confidence in the championship."

Happily, for two of Brown's criteria of evaluation, the answers are fairly positive at this stage. The FE grid is capped at 12 teams, but Audi's decision to exit will leave a clear vacancy. McLaren could buy that Ingolstadt-held entry and fill the slot to participate as a manufacturer of its own powertrain.

However, there's a far more realistic route that might smooth out McLaren's arrival should it go ahead and take up the option to join FE. In the closely linked Extreme E, Brown's United Autosports team has partnered with Andretti Autosport to form Andretti United. In FE, the BMW operation is run by Andretti - which, team principal Roger Griffiths told Autosport, emphatically wants to remain in the series beyond the Bavarian marque's exit.

Further still, speaking about whether Andretti would be open to working with another car maker in the future, he added: "We have or have had relationships with various OEMs across our multiple programmes and are very much used to working directly with an OEM. Our experience of Formula E, along with the recognition of the Andretti brand, would certainly be an asset to any OEM looking to enter or even continue but on a different path, in Formula E."

Given Brown and Andretti already have something of an electric alliance for XE, it's not impossible to imagine a similar tie-up working elsewhere. Should such a deal come to pass, and with Andretti already a four-time FE race winner, it would feasibly ease McLaren's race to be competitive in the championship.

Reigle also explains how Audi and BMW's move for the door might, perversely, factor in the appeal of FE to any prospective teams wanting to be competitive out of the blocks.

He says: "We've been having conversations with other manufacturers who say 'hey, historically we might have faced a challenge coming into Formula E because of the level of investment required on the powertrain, the level of competition on the grid, the ability to cut through with the number of manufacturers already there'.

"Actually, the combination of there being a couple of slots and a little more of an assured voice available... it changes the investment profile. I feel pretty good."

There's also a second criteria that joining FE can help fulfil for McLaren, should it decide to take up its option for 2022. As Brown asks: "does we think it fits with our brands?"

McLaren Applied has been unsung as the exclusive Gen2 battery supplier, a baton it hands on to Williams Advanced Engineering for Gen3. By potentially moving to become a fully fledged team, it can earn greater plaudits for any subsequent success.

This comes as sister arm McLaren Automotive adopts hybridisation for its road cars. Aside from the P1 halo car and its GTR track variant that arrived in late 2013, the series production models have all relied solely on combusting petrol. Coming later this year, it's new 'entry-level' Artura supercar will wave farewell to the long-serving Nissan-derived twin-turbo V8 engine to make way for a V6 hybrid set-up.

For the gradual shift towards electrification for a road car manufacturer that's only a little over 10 years old, one that sells so much of its image based on its motorsport success, joining FE as a team certainly "fits" with the wider McLaren Group. That leaves the greatest barrier to McLaren taking up its FE option as the result of an evaluation into whether FE is "commercially and fiscally sustainable".

The Gen3 regulations are headlined by changes to the car. A 120kg crash diet, a power hike up to 350kW - 470bhp - plus rapid charging capabilities fly the flag. But the far more pressing issue is the introduction of a necessary cost cap, with budgets having quadrupled in six years.

Reigle stresses to Autosport that the deal announced with McLaren has not come off the back of any underlying agreement that a more formal spending limit will be in place come the advent of the 2022-23 season. But for any new entries, and the remaining likes of Jaguar, DS and Nissan more than the others, it's a matter of critical importance.

"Pre-COVID, there's a view perhaps that cost caps and financial regs were really hard to implement in motorsport, obviously they exist in other sports. Now the minds are a little more focused" Jaime Reigle

Reigle says: "Aiming at reducing costs, financial regulations, which aren't agreed yet, it's probably on my top one or two priorities in terms of things I'm working on with the teams and the FIA - and the commercial model that we've agreed for Gen3.

"We're in a bit of a perfect storm in terms of the overall economic backdrop. Since April, we've been in discussions with the teams and manufacturers on 'how do we make the business model sustainable and the investment case compelling?' That's really what we've been focused on in the background for the better part of nine months. It's all coming to a head now.

"We've known and frankly before COVID, as we move into Gen3, we need to figure out how we grow the championship - the number of races, the exposure we generate, how big the championship can be in terms of fans and what that means in terms of the media value and sponsorship dollars and all that.

"The reality is, and I'm relatively new to it [Reigle having joined as CEO in September 2019], but the cost of running a Formula E team in season one and season two, it's materially higher today.

"I think pre-COVID, there's a view perhaps that cost caps and financial regs were really hard to implement in motorsport, obviously they exist in other sports. Now the minds are a little more focused and we've got the technical regulations in place in terms of limitations of spare parts and common new components. So that will have a dampening effect on costs.

"If you can marry that with a cost cap, then you have a really robust system. My view is there's no excuse, we need to do it, we should do it, it's healthy for the championship.

"It's very clear that some of that money that gets spent isn't particularly effective at making the car go faster or allowing the manufacturers and teams to differentiate from each other. It's those areas we need to address. That's happening anyway."

If the cost cap comes into play as required then, at a cursory glance, the three criteria initially listed by Brown can be met to allow for McLaren Racing to take up its option to join the series.

FE can survive without an orange arrival and could just about weather the storm should another manufacturer announce it's to exit stage left. When Audi and BMW wave farewell, there will still be eight constructor teams remaining - a success story from across the entirety of motorsport, despite the grizzly headlines of late.

But should another one fall, FE would need to look increasingly to independent teams to populate the grid if 24 cars are going to remain. To make it financially viable for the comparative minnows to compete, however, FE has to address its costing faults anyway, which would inherently increase the chances of McLaren taking up its option in the first place.

The global health situation, and therefore the calendar to some extent, lie beyond FE's control. But implementing a workable cost cap isn't - no matter how difficult it is proving to suss out beyond closed doors. Sort that out and the good news stories that FE really rather needed at the start of 2021 should generate themselves, starting with McLaren.