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article imageFormula E, EV racing lost about $29 million last year

By Ken Hanly     May 3, 2019 in Sports
Formula E the electric vehicle racing series lost 26.4 euros or about $29 million US during the fiscal year ending on July 31st 201 according to a financial statement filed with the United Kingdom's Companies House registry.
Results are for Formula E's fourth season
The results were for the fourth season that started in late 2017 and ended with two races in New York City. The previous year Formula E races lost 20.8 million euros or about $23.2 million. The year before that its losses were 35.2 million euros or about $39 million.
The Formula E races are now in their fifth season even though some critics thought it would never last this long when it was launched in 2014. The races are overseen by the same governing body as the Formula One races. The series has used a different venue from dedicated tracks instead using temporary street circuits often built in or near the center of major cities.
Major automakers have participated in Formula E races
Major auto manufacturers such as Renault, Audi, BMW, and Nissan are already involved in Formula E racing. Soon Mercedes-Benz and Porsche will join in. In spite of losses Jaguar has also invested heavily in the racing series: "Troubled auto maker Jaguar Land Rover (JLR) has committed $40 million to its team in the electric-powered Formula E race series according to its latest financial statements." However, this is cheap compared to Formula One costs where teams on an average spend about $250 million per season over the last decade.
In spite of losses Formula E races still attract investment
The Formula E races have lost more than $168 million since they began. Yet CEO of Formula E, Alejandro Agag has been able to keep investments coming in and there has been no rush to take money out. Formula E is running much like some Silicon Valley startups and it seems to work.
While still in a loss position for now, season four of Formula E saw a doubling of attendance from the previous season to $476,000. TV viewing also increased from 223 to 330 million.
The new second generation race car has also increased interest in the races. The new car is faster, can race longer, and has a unique design. The new car made its debut in season five that started last December.
The future
While at some point investor's will expect some return on their investment that point has not been reached yet. Agag is finding new sources of funds that could bring Formula E out of the red. The fourth season experienced a huge jump in revenue from promotions and licencing income of about $47 million. The company had sponsorship deals with well-known brands such as Heineken and Bosch.
One of the big promoters of Formula E is Saudi Arabia. Formula E signed a 10-year deal with the Saudis to hold races there. The value is around $260 million according to one person who knows about the deal.
More about Formula E races, Alejandro Agag, electric vehicle racing
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