The cost of running a Formula E team has been revealed in filings from the auto maker Jaguar which show that the operating costs of its electric-powered outfit accelerated by 12.1% to $11.7 million (£8.8 million) last year.
It is around 4% of the typical cost of running a team in Formula E’s gas-guzzling bigger brother Formula One and this has helped it to attract many of the world’s most well-known auto brands. Audi, BMW, Jaguar and Nissan all field Formula E teams and they were joined this season by Porsche and Mercedes giving it more manufacturers than F1.
Many of them are based in Britain where companies have to file publicly-available financial statements. However, Formula E teams tend to swerve around this obligation as they don’t have enough assets, staff or revenue to meet the reporting requirement. Instead, they only have to file abridged financial statements which don’t reveal how much it costs to run the team. Jaguar Racing is an exception as it discloses this and a whole lot more.
As we recently reported in British newspaper, the Sunday Express, in the year to the end of March 2019 Jaguar Racing’s pre-tax profit reversed by 6.9% to just $0.7 million (£0.5 million) on $13.5 million (£10.2 million) of revenue. This was almost entirely provided by the team’s parent company Jaguar Land Rover (JLR) and, according to the financial statements, “in respect of championship prize money received, the company’s revenue is presented net of contractual amounts attributable to its drivers and race partners.”
They include tech giant Panasonic, aerospace components company GKN and German heating system manufacturer Viessmann. Jaguar itself is the most prominent brand on the car with logos on the rear wing, nose, sides and top of the car.
The financial statements say that JLR will “aim to ensure sufficient funding to the racing programme that will allow us to build a team and car that is capable of sustainable championship success in the future.”
They add that during the year Jaguar Racing cleared $11.5 million (£8.7 million) of short-term borrowings from group undertakings through a non-cash settlement and off-set $43.7 million (£33 million) of assets and liabilities with JLR. The consequence of this is that by the end of March the team only owed $1.2 million (£0.9 million) to other companies in the group compared to $30.6 million (£23.1 million) at the end of March 2018.
In addition to helping with this financial restructuring and providing the bulk of the team’s revenue, JLR covers its software development costs and carries out its research and development. There is good reason for this support.
Formula E cars produce no emissions and make little noise which allows their races to take place in the center of cities such as Paris, Berlin and New York. This showcases electric vehicles on the same streets that consumers use which is particularly relevant to JLR as all of its new cars will have an electric option from this year.
Jaguar joined Formula E in 2016 and a spokesperson for the team says that it “is central to our global brand strategy. Formula E is a real world test bed for our move to electrification and has been a key element to the successful launch of the Jaguar I-PACE – our first all-electric Jaguar.” The I-PACE cars compete against each other in a Formula E’s support event making it the world’s first international race series for a production battery electric vehicle.
Jaguar’s Formula E team itself has been slow to rev up. It took a year and a half to get on the podium and only won its first race in April last year when skilled New Zealander Mitch Evans steered it to victory in Rome.
However, the team still isn’t in top gear and finished tenth and seventh in the first two races of the current season which began in November. In just under three weeks weeks it will return for round three in Santiago giving JLR another opportunity to boost its return on investment.
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