Honda's departure from Formula One came down to a singular factor: cost. The amount of cash required to campaign a team (or two) in the top tier of open-wheel motorsports has been on an upwards trajectory for as long as we can remember, and combined with the current economic downturn, it was just a matter of time before a manufacturer questioned whether or not it was worth the expense. That's a tough pill for enthusiasts to swallow considering all the knowledge gleaned from F1 -- not to mention WRC.
However, in an attempt to get costs in check, the FIA announced earlier this year that it would pursue a tender to supply an engine and transmission package to teams for the 2010 season and beyond. F1's governing body announced today that Cosworth has been tapped to provide the new "low-cost" drivetrain, that requires an up-front payment of 1.97 million Euros and then an additional 6.42 million Euros each season during the three-year contract. While 20+ million Euros might not seem like a bargain, it's a pittance compared to what automakers invest developing their own engine. If they opt out of the unbadged Cosworth engine, teams can use their own de-tuned version of the current 2.4-liter V8. Transmission choices are still up in the air, as Cosworth negotiates with Xtrac and Ricardo.
For all the details, you can read Bernie Eccelstone's letter to the teams after the jump.
PRESS RELEASE
The announcement of Honda's intended withdrawal from Formula One has confirmed the FIA's longstanding concern that the cost of competing in the World Championship is unsustainable.
In the FIA's view, the global economic downturn has only exacerbated an already critical situation.
As the guardians of the sport, the FIA is committed to working with the commercial rights holder and the remaining members of FOTA to ensure that Formula One becomes financially sustainable.
The FIA President has today sent the attached letter to all of the Formula One teams:
Further to my letter of 18 November, we have completed the tendering process and are now in exclusive negotiations with Cosworth together with Xtrac and Ricardo Transmissions to supply a complete Formula One power train starting in 2010.
The engine will be a current Formula One engine while the transmission will be state of the art Formula One and a joint effort by two companies which already supply transmissions to most of the grid.
The cost to each team taking up this option will be an up front payment of €1.97 million Euros and then €6.42 million Euros per season for each of the three years of the supply contract.
This price is based on four teams signing up and includes full technical support at all races and official tests, plus 30,000 km of testing.
The annual cost will reduce if more teams take up the option, for example to €5.84 million Euro per team with eight teams. It will further reduce if less than 30,000 km of testing is required. Neither engine nor transmission will be badged.
As suggested in my letter of 18 November, teams participating in the 2010 Championship would then have three options:
In combination with the programme of cost reductions for the chassis, race weekend and team home base outlined in my letter of 18 November, these arrangements have a number of advantages. These include:
In the event of fewer than four teams signing up, the FIA may still proceed but the price on offer will vary. The supply contracts will be with Cosworth but in the first instance teams are requested to make their intentions known to my office.
Yours sincerely,
Max Mosley
However, in an attempt to get costs in check, the FIA announced earlier this year that it would pursue a tender to supply an engine and transmission package to teams for the 2010 season and beyond. F1's governing body announced today that Cosworth has been tapped to provide the new "low-cost" drivetrain, that requires an up-front payment of 1.97 million Euros and then an additional 6.42 million Euros each season during the three-year contract. While 20+ million Euros might not seem like a bargain, it's a pittance compared to what automakers invest developing their own engine. If they opt out of the unbadged Cosworth engine, teams can use their own de-tuned version of the current 2.4-liter V8. Transmission choices are still up in the air, as Cosworth negotiates with Xtrac and Ricardo.
For all the details, you can read Bernie Eccelstone's letter to the teams after the jump.
PRESS RELEASE
The announcement of Honda's intended withdrawal from Formula One has confirmed the FIA's longstanding concern that the cost of competing in the World Championship is unsustainable.
In the FIA's view, the global economic downturn has only exacerbated an already critical situation.
As the guardians of the sport, the FIA is committed to working with the commercial rights holder and the remaining members of FOTA to ensure that Formula One becomes financially sustainable.
The FIA President has today sent the attached letter to all of the Formula One teams:
Further to my letter of 18 November, we have completed the tendering process and are now in exclusive negotiations with Cosworth together with Xtrac and Ricardo Transmissions to supply a complete Formula One power train starting in 2010.
The engine will be a current Formula One engine while the transmission will be state of the art Formula One and a joint effort by two companies which already supply transmissions to most of the grid.
The cost to each team taking up this option will be an up front payment of €1.97 million Euros and then €6.42 million Euros per season for each of the three years of the supply contract.
This price is based on four teams signing up and includes full technical support at all races and official tests, plus 30,000 km of testing.
The annual cost will reduce if more teams take up the option, for example to €5.84 million Euro per team with eight teams. It will further reduce if less than 30,000 km of testing is required. Neither engine nor transmission will be badged.
As suggested in my letter of 18 November, teams participating in the 2010 Championship would then have three options:
- The above.
- The right to build an engine themselves, identical to the above, having been supplied with all the necessary technical information.
- The right to continue to use their existing engine, with the current ban on development and requirement for engine parity still in place.
In combination with the programme of cost reductions for the chassis, race weekend and team home base outlined in my letter of 18 November, these arrangements have a number of advantages. These include:
- Enabling the independent teams to survive in the current difficult economic climate.
- Facilitating the replacement of a manufacturer team if we suffer additional losses.
- Stabilising Formula One while new road relevant technologies are introduced together with a state of the art high tech engine, which could be in Formula One as early as 2013 should the car industry by then be in a position to fund its development.
- Avoiding any change to the Formula One spectacle and keeping the technology at current levels.
In the event of fewer than four teams signing up, the FIA may still proceed but the price on offer will vary. The supply contracts will be with Cosworth but in the first instance teams are requested to make their intentions known to my office.
Yours sincerely,
Max Mosley
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