The problems laid bare by Mercedes' impending Formula E departure

Formula E’s survival is not dependent on any one manufacturer or team. But the doomsday clock has undeniably ticked closer to midnight after the Daimler boardroom finally decided in the last two weeks that Mercedes should quit the series at the end of the 2022 season.

Last weekend’s Berlin E-Prix, when Nyck de Vries took Mercedes to a drivers’ and teams’ title double, also marked the final outings for BMW and Audi. Yet losing the Three-Pointed Star from the grid feels like a more punishing blow. Not only is it the most high-profile marque on the grid but, at the time of the decision, the board opted for the exit door after fewer than two complete seasons in Formula E, a championship which will come to define a significant chunk of the legacy of its key architect and outgoing FIA president Jean Todt.

The governing body and the series can look to the global health crisis as exacerbating matters and might recite the line that ‘manufacturers come and go in motorsport’ as they have with regards to BMW and Audi. But to do that again would be to critically under appreciate the loss of Mercedes.

There are four key elements to the future success of Formula E: the technical roadmap, the financial regulations, the commercial opportunities, and the sporting format. Daimler has found fault with the full quartet.

On the technical side, the arrival of the Gen3 rules for the 2022-23 season will mark the advent of 470bhp cars that have gone on a 120kg crash diet, while in-race rapid-charging pitstops will be introduced. These elements mark a sizeable step forward on the current 335bhp maximum available in Gen2, even in the context of the near-700bhp machines now plying their trade in Pure ETCR.

However, generational regulations that last for four years at a time now exist in a world where governments are preparing to ban the sale of petrol and diesel cars over the next decade. That has led a plethora of OEMs - including Ford, General Motors and Honda - to commit to all-electric road car line ups by 2040. Last month, Mercedes added itself to that ever-growing list and has outlined a £34 billion investment to get it there.

As the automotive markets goes through arguably the most seismic shift in its history, the rate of development is beyond steep and Formula E’s periods of regulatory stability are out of sync with this rapidity.

Nyck de Vries, Mercedes-Benz EQ, EQ Silver Arrow 02

Photo by: Sam Bloxham / Motorsport Images

Some manufacturers expressed their desire for Formula E to open battery development and move away from the standardised setup that will be provided by Williams Advanced Engineering in Gen3. That would have aided the series in remaining a technological testbed, but it would have left it exposed as it is at odds with the second factor, the financial rules.

PLUS: The F1 dilemma facing Mercedes' new world champion

Championship chief executive officer Jamie Reigle is one of the fiercest proponents in Formula E’s quest to introduce a cost cap. Early figures outlined by FIA director of Formula E Frederic Bertrand stand at €20-€25 million for manufacturers on a two-year rolling basis. But these limits aren’t expected to coincide for the first season of Gen3. After all, the meetings of the Technical Working Group, which Mercedes has attended, are underway and data has been accessed. It’s already too late for that initial spending to be undone.

This leaves Mercedes vulnerable as the biggest-spending participant in Formula E, reckoned to be writing cheques in excess of £50m for the current two-season homologation cycle. That is a figure which appears as a big blip on the Daimler radar. It is a concern that comes amid boardroom stability, unlike the changes of leadership and direction at Audi (with Julius Seebach replacing Dieter Gass as the head of motorsport) and BMW (Markus Flasch took over from Jens Marquardt as interim motorsport director).

Last weekend’s Berlin E-Prix also marked the final outings for BMW and Audi. Yet losing the Three-Pointed Star from the grid feels like a more punishing blow

Some of the Mercedes coins are recovered by the Formula E team. Set aside powertrain development and factor in deals with headline partners Vestas (wind turbines), NEOM (Saudi Arabian city project), SAP (software) and Modis (digital technology), and the outfit is understood to be comfortably profitable.

While that model works, the commercial opportunities in Formula E aren’t so rosy. At Tempelhof Airport last weekend, when up to 10,400 tickets were on public sale across both days for the first time this season starting from €49, trackside attendance was poor. To Autosport’s eyes, it was hundreds on the Saturday, a couple of thousand at best on Sunday for the title decider. TV audiences aren’t where they need to be either to make Formula E overcome its technical limitations in favour of being a series designed around entertainment.

Then there’s the present issues with the sporting format. The FIA regulations have come under fire repeatedly throughout 2021, with the Valencia energy debacle the greatest flashpoint. Mercedes driver Stoffel Vandoorne losing pole in Spain and Porsche missing out on its maiden win with Pascal Wehrlein in Mexico - both through administrative errors on the cars’ technical passports to no competitive advantage - have drawn both public and internal chagrin.

The most persistent frustration is the current group qualifying format, which puts the top six of the championship out on a ‘green’ circuit that doesn’t offer up grip and frequently sends the big hitters to the back of the grid.

Stoffel Vandoorne, Mercedes-Benz EQ, EQ Silver Arrow 02, Oliver Rowland, Nissan e.Dams, Nissan IMO3, Alexander Sims, Mahindra Racing, M7Electro, Norman Nato, Venturi Racing, Silver Arrow 02, at the start

Photo by: Rudy Carezzevoli / Motorsport Images

If Anthony Joshua loses a heavyweight boxing match, it might be because he’s had a bad day, is ill or his opponent was simply better. But it’s not because of the rules themselves - unlike in Formula E at present.

Under pressure from teams, and with a desire to create repeat winners who can become ‘heroes’ for the series, and in turn garner more regular coverage in a bid to raise the audience numbers, Formula E is working to address this.

The by-product of this unpredictability, or randomness, is that Mercedes has little guarantee that its big spending will be sufficiently rewarded. While it did eventually snare the 2021 teams’ title by four points, it could have easily been beaten by the more modest budgets of Jaguar Racing and DS Techeetah. That wouldn’t have hit the desired ‘return on investment’.

A revised qualifying format is expected to be revealed at the next meeting of the FIA World Motor Sport Council in Paris on 15 October. Autosport understands that despite the number of voices involved, teams and the championship are in broad agreement. The stumbling block is said to be coming from the governing body.

At this meeting, alterations are also expected to be voted in with regards to the race format, whereby energy reductions resulting from safety car periods will be replaced in favour of time added on to the standard 45 minutes plus one lap. This is to avoid an unwelcome repeat of Valencia.

The worry is, Mercedes - and by extension Daimler - is privy to these talks. It knows about the exciting potential of Gen3 (even if current testing is believed to be well behind schedule). It knows that a cost cap is very high on the agenda and that the format changes are inbound. Yet that’s not enough to entice the Silver Arrows to remain.

Nyck de Vries, Mercedes-Benz EQ, EQ Silver Arrow 02

Photo by: Sam Bagnall / Motorsport Images

There is, however, some cause of optimism. Chiefly, those involved day-to-day in the Mercedes Formula E team, despite the frustrations, love competing in the championship. This goes some way to explaining why bosses Ian James (team principal) and chief executive officer Toto Wolff are seeking private investment to ensure the ensemble can remain for Gen3 as an independent and rebranded entry.

Wolff has been heavily engaged with the series, not least through attending the Rome, London and Berlin rounds this season. Mercedes also communicated in advance with Formula E and has been giving signals that a departure was on the cards, rather than provide the hours’ notice of a bombshell that BMW did after going quiet last autumn.

While an Abt entry to replace Audi in Formula E appears very unlikely to arrive in time for next season following a commercial deal falling through, the German squad retains a key interest in returning in time for Gen3. If an independent iteration of the current Mercedes setup also remains, the championship will retain a capacity 24-car grid and leave no room at the inn for McLaren Racing to take up its option deal. Even if that trail does appear cold after a potential three-way McLaren-Andretti Autosport-Mercedes attack was believed to be under consideration.

Similarly, there are advantages to having more race teams than manufacturers. It cuts back on the politicking and bureaucracy. It offers Formula E the chance to be more nimble. That’s something Alejandro Agag has made clear while establishing Extreme E.

But Mercedes’ exit still creates a major public image problem. And it leaves any prospective entrants hovering around Formula E with something to mull over. Does the announcement of the loss of a third manufacturer in under nine months speak of a lack of confidence in the future direction of the series or, conversely, will it offer a better chance to win and more of an opportunity to have a voice?

Stoffel Vandoorne, Mercedes-Benz EQ, EQ Silver Arrow 02

Photo by: Sam Bloxham / Motorsport Images