Formula E’s Moment: Why Rising Energy Prices Could Make Electric Motorsport Strategically Essential For Automakers
Judging Formula E purely as a racing product may miss the point entirely.
The championship was not created primarily to compete with other motorsports for entertainment value. It was designed as a strategic platform for electrification, one that connects automotive manufacturers, energy companies, and urban mobility ecosystems around the transition to electric vehicles.
If global energy markets shift again, that strategic positioning could suddenly become extremely important.
With geopolitical tensions pushing oil prices upward and consumers once again confronting rising fuel costs, the conditions that accelerate electric vehicle adoption may be returning. If that happens, the decade-plus of investment automakers have made in Formula E could finally deliver its intended value.
Because Formula E was built for exactly this moment.
Are Rising Oil Prices Setting the Stage for Chinese EVs the Way the 1970s Oil Crises Launched Japanese Cars?
History rarely repeats itself exactly, but it often rhymes.
In the 1970s, two major oil shocks bookended the decade, causing a considerable shift in the automotive market of the time, particularly in the US.
Indeed, the US was known for producing large displacement muscle cars which, while impressive, were not fuel efficient. If consumers believed the worst was over after the 1973 crisis, the 1979 oil shock likely forced them to reconsider their usual choices and give smaller, more fuel-efficient Japanese cars a chance.
The result was one of the most consequential shifts in automotive history: Japanese automakers rapidly gained credibility, market share, and eventually global leadership.
Today, another period of oil price volatility is raising an interesting question: could the current moment do for Chinese electric vehicle manufacturers what the oil crises of the 1970s did for Japanese carmakers?
The parallels are not perfect, but they are certainly striking.
The Business Case for Motorsport
A Motorsport Strategy Framework for Creating Brand Value, Technology Credibility, and Commercial Return
Racing Is Not About Lap Times: Why Factory Programs Exist to Solve Business Problems, Not Win Races
Here is the concept that separates lasting factory programs from financially unsustainable ones, and the one that is likely to anger many a motorsport fan and professional:
You only need enough performance, coupled with a plan, to remain commercially credible; you do not need to dominate.