The silent revolution

The Silent Revolution

SPECIAL REPORT | MOTORSPORT

The silent revolution Spanish entrepreneur Alejandro Agag jumped at the chance to acquire the commercial rights to Formula E, the first world championship for electric cars, ahead of its launch next year. He is now assembling the venues, teams and partners for what might yet become motorsport’s most important series.

By David Cushnan

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here have been plenty of motorsport championships launched over the years – some successfully, some rather less so – but none has debuted with as distinctive a mission as Formula E. Formally launched by world motorsport’s governing body, the FIA, in August 2012, Formula E will be the first global racing series for electric cars. From September 2014, short madefor-television races, featuring identical single-seaters and drivers’ switching cars mid-race to allow battery recharging, will be staged on street circuits in ten cities around the world, from London to Los Angeles, Beijing to Berlin. The mission is straightforward and also, potentially, revolutionary: to promote the use of sustainable electric vehicles on the road, particularly to a younger generation who may one day consider that the norm.

While the creation of Formula E offers the FIA, which is responsible not only for global motorsport but global motoring in general, a major opportunity to showcase a variety of its key values – clean energy, mobility and sustainability – the organisation has signed away the new championship’s commercial rights to a consortium of investors known as Formula E Holdings. The company’s frontman is Alejandro Agag, a Madridborn politician and businessman who has flitted in and around Formula One for over a decade, firstly acquiring, with Flavio Briatore, the Spanish television rights to the sport and then through ownership of GP2 team Addax. He was also once a co-owner of English soccer club Queens Park Rangers alongside Bernie Ecclestone, Briatore and Lakshmi Mittal.

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with host cities and teams and creating the business model which will underpin the series. Equally critical has been the technical groundwork, not least the development of the first generation of Formula E cars. While the car itself is being built by French firm Spark Racing Technology, three active Formula One participants are contributing: Williams’ Advanced Engineering division is supplying the all-important battery power units, and McLaren Electronic Systems the electric engine, transmission and electronics, while Renault has committed to help to fine-tune engines and optimise electronics. Italian manufacturer Dallara has designed the first chassis, although the cars, a test version of which has been demonstrated by Brazilian driver Lucas di Grassi at major landmarks during host city announcements, will be known as Spark Renaults. The longer-term plan is for manufacturers to build and enter their own cars to showcase their own electric vehicle ranges.

“What we hope is people will start watching the series and realise that electric cars are a valid option for their day-to-day lives,” explains Agag, pausing between detailed negotiations with host cities in July to outline the Formula E vision.

The statistics, however, suggest there is still plenty of work to do on that front. In April, the International Energy Agency (IEA), a government organisation with 28 member states, published a report which stated that only 0.02 per cent of the total number of passenger cars on the world’s roads last year were electrically powered – around 180,000 vehicles. Although the same report showed that global electric vehicle sales more than doubled between 2011 and 2012 – from 45,000 to 113,000 –

the current figures indicate the scale of the task in convincing a largely sceptical public of the merits of electric. “Right now, the image of electric cars is improving rapidly, but it is still not where it should be,” Agag concedes. “People see them as something ugly, slow and not going far, a lot of negative things. We need to change that perception so our hope is we change the perception on electric cars, so they will buy them – especially young people, so the first car they buy is an electric one. My dream objective would be people will buy more electric cars.”

The plan is for Formula E to help drive awareness in electric vehicles at the same time as government-led investment in research and development strives to reduce the cost of their batteries and make them a more viable option for the everyday road user; since 2008, governments around the world have invested some US$8.7 billion in battery research and development.

Aside from what Agag himself calls the “obvious reason” for getting involved in such a project, namely “a preoccupation with the environment and for the future of my kids”, the Spaniard has spied what might be a golden commercial opportunity. “I was working with different sponsors in motorsport,” he says, “and more and more they were expressing their priority to turn towards sustainable options for their sponsorship budgets. When this idea came around, and I must say it was an idea that really came from the FIA, I thought this could be that option – a unique offer for those sponsors looking for sustainable ways to promote their brand.”

Michelin, as tyre supplier, and Tag Heuer, the official timing partner, are

already confirmed, alongside the technical partners involved in the design and build of the cars, but it is Agag and a consortium of private investors who are underwriting Formula E’s launch. “The philosophy is that we need to get the ball rolling,” Agag explains. “This is a bit of a chicken and egg situation. There was no electric car championship because there were no electric racing teams; there were no electric racing teams or cars because there was no electric championship.

We see our role as a promoter to put it together and then once everything is working sponsors will come, teams will come and drivers will come. But you need someone really to push in terms of the economics. We have partners approaching

us and in some areas we have partners that are sharing with us the investment.

The revenues will either be 100 per cent for us where we are taking the whole risk, or we share it where we have partners.”

Central series sponsors will be sought but the initial focus has been on shoring up technical resources first. “The technical partners need to be involved as soon as possible,” Agag points out.

“We want to shape the championship together with them. Once the technical partners are sorted we will go to the commercial and corporate partners. We are having great conversations and great interest from big corporates to join the championship. So far, most of these corporations are looking for some kind

of technology partnership with us, some kind of cooperation that gives sense to the partnership. It’s not difficult to find because all of them have sustainability strategies in different areas that can be, in some way or another, associated or implemented around our championship.

“We have different categories for corporate partners: a cup sponsor, who will be naming the cup, we will have a global sponsor that will have branding on every car and then we have nine E partners that take the different categories – telecom, airline, etc.”

Formula E will retain 17 per cent of the branding space on each car in the series for its central partners, with the remaining 83 per cent available for the teams to

“What we hope is people will start watching the series and realise that electric cars are a valid option for their day-to-day lives.”

The inaugural season of the FIA Formula E series will be raced in the Spark Renault, based on a chassis designed by the Italian manufacturer Dallara

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Alejandro Agag, pictured with Formula E exhibition driver Lucas di Grassi, is the Spanish entrepreneur fronting the series owner Formula E Holdings

sell on an individual basis. As Agag was speaking in July, two of the proposed ten teams had been confirmed: a British entry from Drayson Racing, which in June set a new land speed record for an electric vehicle of 204.185mph, and a team from China fronted by motorsport

entrepreneur Yu Liu. A third team, Michael Andretti’s Andretti Autosport Indycar outfit, was confirmed a couple of weeks later, with negotiations ongoing for the other entry slots. “Most of them are existing motorsport operations,” Agag says, when asked whether those talks were

with established teams. “We really want to have teams from different countries. We definitely want to have a team from Japan, we want a team from India, we want to have probably two teams from the US.” The key, in Agag’s view, to attracting entries is twofold: the opportunity

Formula E’s TV trump card: the car switch

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ndurance motorsport has driver-swapping, but, thanks to the battery technology the series is utilising, Formula E will see drivers switching cars mid-race in what promises, initially at least, to be a novel spectacle even for hardened motorsport fans. “The key is there will be two mandatory pit-stops but there is no recharging,” explains Agag. “It introduces a real element of strategy and how they’re going to play it.”

The Spaniard paints a picture of how the car change will work. “The car will come in for a pit-stop,” he explains. “We have been looking at different options and depending on how long the pit-lane is, the element of racing between cars may still be there but at the moment

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we haven’t been able to find a proper solution to have drivers’ racing from one car to another on foot, with the traffic of the other cars. There are certain risks if they run in the pit-lane. In some places there is space to do a separate runway for the drivers, so we may introduce this element, but otherwise the car will come into the garage and the change will happen there. The driver will have a fixed number of seconds to buckle up, so we make sure everything is safe, then he goes. But the time getting out and jumping in the other car will count so the one doing it faster will make two or three seconds, which may allow him to overtake.

“It’s ideal for the broadcasters we’re talking to – the part that the

broadcasters like most is probably the part the motorsport purists like least, the change of car. Television loves it. They think that’s going to be a key moment in the whole broadcasting of the championship.”

Media rights specialists MP & Silva have been hired to create and execute a broadcast strategy for the series. Agag is confident broadcasters will invest in the product. “We are in very advanced negotiations with global broadcasters to have live coverage of the races,” he confirms. “We think the format is key: short, because the attention span of the new generation is shorter – you need a more concentrated product, a lot of action. That’s what we will provide, with a race that will last under an hour.”

Race on through Electric Avenue

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lthough final negotiations are still taking place, agreements have been reached over the past ten months or so with ten major world cities to host Formula E races from September 2014. Bangkok, Beijing, Berlin, Buenos Aires, London, Los Angeles, Miami, Rio de Janeiro, Rome and the Malaysian new city of Putrajaya are all slated to be part of the inaugural season, which will run over the European winter so as not to clash with existing motorsport championships.

It is undeniably an impressive list and one which took even the series organisers by surprise. “To be honest it was a complete question mark, what the reaction of the cities would be to this,” admits Alejandro Agag. “The key message from these cities is that the cars are electric, so this gives a very

strong message, that electric cars are the solution for cities. The level of sound is lower, we will be at a figure of around 80 decibels [Formula One cars generate at least 120 decibels], which is a figure that is acceptable for noise pollution levels in most city centres. With those elements, we’ve had a great welcome from cities – our idea to race in the main cities in the world is really going to be a reality, we think.

“We are in the phase of the final agreements in terms of details of traffic changes, diversions, street closures, works to be done and so on,” Agag adds. “That’s the priority on that side, which is quite a challenge in terms of logistics – ten races in ten cities around the world is something that has never been done before. Some cities have racetracks inside the city, some others have nice facilities like parks or other

areas, some others are more complicated because we race on the streets. This is one of the main tasks we are now working on.” The apron of the old Tempelhof airport has already been confirmed as the venue for Berlin’s annual event, while an artist’s rendering has suggested Beijing’s Olympic Park as a potential Chinese venue. London’s Olympic Park has been mooted as the UK location.

Given that sustainability will inevitably be a watchword for the series, Agag is keen to point out that each host city will have its own set of walls and catch-fences, to cut down on the equipment needing to travel from venue to venue. “We have a CO2 footprint, obviously,” he says, “but we’ve minimised, as much as we can, everything around the championship which needs to be transported.”

Agreements have been reached with ten major cities, including Rome, Los Angeles, and Berlin, to host Formula E street races from September 2014

to be involved in a pioneering a new technological pursuit and the €2.5 million operational cap to which teams must adhere. “You can run a Formula E team for a limited cost,” Agag explains.

“Above the €2.5 million you can spend on driver salaries and marketing, but not on operating the team. With that, we think teams will find it easy to make a profit.

When we announce broadcasting deals with television, teams will have a very good shot at selling sponsorship spaces.”

Agag, an avid motorsport fan himself, is well aware that Formula E has been greeted with a degree of scepticism in some quarters. Obvious comparisons have been made, as with any start-up series, with Formula One, but Agag, astutely, is

having none of it. “We don’t see ourselves as an alternative to any other type of motorsport,” he says. “We see ourselves as a complement. I think we’re coming into a new space that wasn’t filled before. There is room for this kind of racing – short races, inside cities, with new technology. There is definitely space for that. And we think some motorsport fans will be attracted by it, but also some non-motorsport fans can be attracted by it. We would really like to work on them and the younger generation to attract them to motorsport.”

He insists that the credibility the series craves will only be won if the product delivers. That, he argues, will be the moment the sceptics will be won over.

“These guys will be looking at the first

race,” he says, “looking at the grid, waiting to see what happens and if what happens is great, like we expect – and I’ve heard the sound of these cars and I think it’s going to be completely amazing – and a good race, with good drivers fighting for victory, I think they will like it. If we produce a bad race where everything is fake, then they will be right. We will do everything in our power to prove them wrong and try to convince them to join us in what we call the silent revolution.

“But we are definitely going with the trend and we can feel it,” he adds, clearly relishing the task ahead. “We are in the middle of a river and we’re going in the direction the water is going so we’re in exactly the place we want to be.”

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