Payne: GM’s billion-dollar Vegas bet on Formula One power unit

Posted by Talbot Payne on November 17, 2023

General Motors Co.’s announcement Tuesday that it has registered with Formula One racing to develop a gas-electric hybrid powerplant for its Andretti Cadillac F1 team by 2028 marks a major commitment by the Detroit automaker to the world’s biggest motorsport — and to a battery-powered future.

The commitment puts GM in elite company with Mercedes, Ferrari and Red Bull Ford at the top of the sport in developing a “power unit” (F1 speak for a hybrid drivetrain) and comes as Andretti Cadillac enters a critical period in convincing the Formula One Management group to allow them entry into the sport. GM’s top brass and Michael Andretti, CEO of Andretti Motorsports, are expected to be at the Las Vegas Formula One race this weekend to make their case.

By making its commitment as the seventh company to develop an F1 power unit, GM hopes approval is now irresistible. Call it the General’s billion-dollar Vegas bet.

Cadillac has taken the lead in GM’s electric transformation and is a natural fit for Formula One.Cadillac has taken the lead in GM’s electric transformation and is a natural fit for Formula One.

“Getting a place on the Formula 1 grid has been a box-ticking exercise for Andretti Cadillac, and every time they think they’ve checked the final one — another pops up,” said Charles Bradley, editor-in-chief of Motosport.com, the globe’s largest racing site. “One of the major criticisms, aired by Red Bull team boss Christian Horner, was that Andretti has to have GM-Cadillac as more than a name to put on its car — but a manufacturer that would build an engine. So it’s vital that the project checks this box.”

Formula One is at the peak of the world’s automotive development in chassis, suspension, tire and drivetrain technology. As global governments from China to the United States to Europe force automakers to go all-electric, the global Formula One circus has made a commitment to go all-electric as well — beginning with its 2026-2030 power unit regulations that prescribe engines be powered 50/50 by batteries and V-6 engines gassed with synthetic fuel.

“We are thrilled that our new Andretti Cadillac F1 entry will be powered by a GM power unit,” said GM President Mark Reuss, a passionate voice for motorsports within the company. “With our deep engineering and racing expertise, we’re confident we’ll develop a successful power unit for the series, and position Andretti Cadillac as a true works team.”

Formula One power units are a billion-dollar development commitment, with each engine costing upwards of $10 million. While that is a rich number for even mega-manufacturers like GM, it is part of a multi-billion company strategy to go all-electric by 2035, with the automaker already investing billions in its Ultium battery platform and plants. The company sees motorsport as an opportunity, not just to market its technological prowess, but to accelerate technology transfer between racing and production applications in batteries, fuels, engines, and software system

If approved by F1, Andretti Cadillac will compete against racing F1 behemoths like Red Bull Ford, Mercedes, and Ferrari. Red Bull driver and 2022 champion Max Verstappen of the Netherlands competes during the Formula One U.S. Grand Prix auto race at the Circuit of the Americas, Sunday, Oct. 23, 2022, in Austin, Texas.If approved by F1, Andretti Cadillac will compete against racing F1 behemoths like Red Bull Ford, Mercedes, and Ferrari. Red Bull driver and 2022 champion Max Verstappen of the Netherlands competes during the Formula One U.S. Grand Prix auto race at the Circuit of the Americas, Sunday, Oct. 23, 2022, in Austin, Texas.

“The initial outlay on a new Formula 1 engine is likely a nine-figure sum, which will be offset by GM already having a highly-developed R&D powertrain team that will be familiar with the demands of electrical hybrids,” said Bradley.

Ford has also made a commitment to F1, partnering with Red Bull — which has dominated the sport this year behind ace driver Max Verstappen — to set up a delicious Motown rivalry at the top of global racing. Ford’s financial commitment, however, is not nearly as expansive as GM’s, as the Blue Oval will supply battery expertise while Red Bull engineers the full drivetrain.

“The power unit is at the forefront of technological innovation, making the future of Formula 1 more sustainable while maintaining the spectacular racing,” FIA President Mohammed Ben Sulayem said.

In addition to Red Bull Ford, Ferrari and Mercedes, other manufacturers that have committed to F1’s 2026 power unit are Alpine Racing, Audi and Honda.

GM’s global Cadillac luxury brand has taken the lead in GM’s transformation and is a natural fit for Formula One with its massive, 450-million global television audience and suites and paddocks filled with upper-class customers who have been the most willing to buy electric cars.

“What GM needs is specialist Formula 1 knowledge, and that will be thin on the ground with all the other F1 manufacturers geared up for the new 2026 power units,” said Bradley. “If GM is in F1 for the long haul, then the development and manufacturing costs could top $1 billion. (That’s) a significant outlay, and it can’t afford to undercook this.”

GM said that development and testing of its F1 power unit is already underway. But Andretti Cadillac is also committed to getting its feet wet in the sport ahead of 2028 with a 2025 entry using the sport’s existing hybrid tech. Alpine is rumored to be its choice of engine partner if Andretti Cadillac gets the green light as the 11th team on the F1 grid.

Michael Andretti, left, listens as McLaren CEO Zak Brown speaks in the paddock ahead of the Formula One U.S. Grand Prix auto race at Circuit of the Americas, Friday, Oct. 20, 2023, in Austin, Texas. GM President Mark Reuss said the automaker won't drop its partnership with Andretti Global as it seeks to enter F1 racing.
(Credit: Darron Cummings, AP)Michael Andretti, left, listens as McLaren CEO Zak Brown speaks in the paddock ahead of the Formula One U.S. Grand Prix auto race at Circuit of the Americas, Friday, Oct. 20, 2023, in Austin, Texas. GM President Mark Reuss said the automaker won't drop its partnership with Andretti Global as it seeks to enter F1 racing.
(Credit: Darron Cummings, AP)

That green light is hardly assured despite the high profile that the Andretti and Cadillac names bring in the United States, F1’s fastest-growing market with three grand prix in ‘23.

FOM is made up of the sport’s racing teams and they have been resistant to sharing the sport’s wealth with another team. Ferrari, for example, ahs been downright dismissive of the idea, but the FIA’s approval in October of Andretti Cadillac was seen as a crucial push to get a deal done. Michael Andretti has rubbed some FOM members the wrong way with his blunt manner, but Reuss has been steadfast that Cadillac’s involvement is contingent on Andretti managing the team.

England-based Williams F1 team boss James Vowles recently weighed in in support of GM and the value it would bring as a major production-car manufacturer. Insiders also say that an American team backed by an American manufacturer (Andretti also promises American drivers) is crucial for the sport’s long-term U.S. health — not to mention the huge sums a battery-powered sport will require.

GM President Mark Reuss has been a passionate advocate for auto racing as part of GM's portfolio.GM President Mark Reuss has been a passionate advocate for auto racing as part of GM's portfolio.

Cadillac and Ford have long played in motorsport from sportscars (Cadillac won the North American IMSA championship this year) to NASCAR (2023 champ Ryan Blaney drove a Ford) to IndyCar (2023 Indy 500 winner Josef Newgarden was Chevy-powered). But those tightly regulated series pale in comparison to the financial commitment — and global reach — of F1. Beyond the 10-figure cost of drivetrain development, F1 teams typically burn a half a billion dollars annually.

As GM makes a historic transition to battery power, F1 is a powerful statement of that commitment.

Henry Payne is auto critic for The Detroit News. Find him at hpayne@detroitnews.com or Twitter @HenryEPayne.

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