Penske upbeat on auto industry, racing. An all-electric future? Not so much

Posted by Talbot Payne on June 13, 2021

Belle Isle — After a turbulent, COVID-cursed year that saw the Detroit auto industry shuttered, fan-free auto racing, and the cancellation of the Detroit Grand Prix, Roger Penske is bullish on the future of the auto industry.

All-electric vehicles? Not so much.

“If I had to do it again, we would still make the investment” in IndyCar, said The Captain (as his troops fondly call him) in a wide-raging media interview Friday in the Team Penske trailer in the Chevrolet Detroit Grand Prix paddock. Penske Entertainment Corporation bought IndyCar and its crown jewel, the Indianapolis Motor Speedway, in November 2019, just months before the coronavirus struck.

Roger Penske answers media questions in his Team Penske trailer at the Chevrolet Detroit Grand Prix.

Motor racing is the intersection of the Penske auto empire that includes dealerships, Team Penske race teams, truck rentals, Indy, and the relentless technology transfer from racing to production vehicles. But as governments from Washington state to England try to eliminate the gas engine by 2030, Penske does not see the market following suit.

“I don’t think you’re going to see the world go all-electric,” said the soft-spoken 84-year-old, whose corporate headquarters are just up the road in Bloomfield Hills. “I think you’ll see hybrid solutions in all kinds of transportation sectors. There will be mandates in some cities. (But) I don’t see the market making a pivot and moving to 10-15% of market overnight.”

IndyCar, for example, will not follow the lead of Formula E — featuring battery-powered open-wheel racers — which has attracted European manufacturers like Porsche and Jaguar as that continent’s governments mandate battery-only transport. Instead, IndyCar engine makers Chevrolet and Honda — which have both pledged the elimination of gas engines in the next two decades — are developing a new generation of gas engines with hybrid-electric assist.

NASCAR and IMSA — racing series where Team Penske competes (IMSA is on the show card this weekend with IndyCar) — are also moving to hybrid engines, not all-electric.

“Formula E hasn’t gotten any money out of their investment,” said Penske. “The manufacturers are focused on what motorsports they want to to be in. You need to have something in your brand that shows you can win.”

Penske says IndyCar is in talks with two other automakers to provide hybrid powertrains for IndyCar. He says that manufacturer prospects for IMSA’s 2023 sportscar prototype LMDh class are even brighter with seven to eight automakers (including Team Penske’s Porsche team) interested in developing hybrid gas-electric racers.

He added: “It will be quite a while before the ICE (internal combustion engine) is out.”

Today’s buffet of car options seems to suit the market just fine, said Penske, as buyers — flush with cash after months in quarantine — are in a buying mood.

“After COVID, and looking at supply right now, we can sell most anything,” said Penske who owns dealerships across the country through his Penske Automotive Group and Penske Motor Group subsidiaries.

That health in turn drives auto racing. Belle Isle is a testament to the healthy intersection of racing and the industry.

After falling silent to race engines in 2020, the Detroit Grand Prix weekend is back this year without losing its primary sponsors. The series as a whole has maintained its top sponsors as well.

For Penske, the Detroit GP is personal as well as business-related.

“This is where I live,” he says. “We’re focused on autos. We have so many different relationships with the auto companies. In Detroit, you gotta give back. It started back in 2006 with the Super Bowl.”

With COVID receding in the rear-view mirror, Penske’s Detroit GP brought the venue back to life in just four weeks. Admission has been capped at one-third of normal attendance, but the GP is also the first major U.S. race to go maskless. Unlike other sports series, IndyCar and IMSA were not embroiled in political controversies over the last year.

 “The die-hard fan is here,” said Chairman Bud Denker.

He and Penske see a bright road ahead after months of uncertainty. “IndyCar is in a better position as a baseline than it’s ever been,” says The Captain.

Still, even Penske said he had butterflies Memorial Day weekend as he — and a crowd of 135,000 — awaited the green flag at the Indianapolis 500.

“When they said ‘gentlemen, start your engines,’ I was shaking like a leaf,” he smiled. “It was exciting to see the response of the crowd.”

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