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Abu Dhabi, UAEThursday 13 December 2018

Formula E sparks a whole new wave of global interest

From leading manufacturers such as Jaguar to top brands such as Hugo Boss, electric racing is proving transformative

All the major car manufacturers are slowly getting involved in Formula E with Nissan joining the circuit for the next series, which starts in December.  EPA/SASHENKA GUTIERREZ
All the major car manufacturers are slowly getting involved in Formula E with Nissan joining the circuit for the next series, which starts in December. EPA/SASHENKA GUTIERREZ

Formula E, the electric version of Formula One, is only in its fourth season but as the coastal resort city of Punta Del Este in Uraguay gears up for the sixth race of 12 globally on Saturday, this nascent sport is quickly attracting a growing following worldwide among fans and sponsors.

“Formula E is approaching the field of motorsport totally differently. The races are in big city centres and they do a lot with social media and are attracting a different audience,” says Tristan Summerscale, project manager for Formula E at Audi.

From leading manufacturers such as Audi and Jaguar to top brands such as Hugo Boss and TAG Heuer, Formula E is quickly proving transformative.

Part of the reason is the increasing amount of positive buzz around the sport was highlighted in the recent SportsIndex Annual Buzz report.

epa06578139 Drivers compete during the 2018 Mexico City E-Prix at the Hermanos Rodriguez racetrack in Mexico City, Mexico, 03 March 2018.  EPA/SASHENKA GUTIERREZ
Drivers compete during the 2018 Mexico City E-Prix at the Hermanos Rodriguez racetrack in Mexico City. Sashenka Guttierez/EPA

Produced by SMG Insight and YouGov, the report measures positive sentiment in 60 sports in the United Kingdom by monitoring consumer feedback for two weeks around a major sports event.

With Silverstone – the host for the British F1 Grand Prix – activating its break clause, interest about that event fell to a five-year low but surged for Formula E, which was among the 10 highest movers in the 2018 report, which covered the sports’ third series.

“The fact that it was competitive was a big part but there’s also the interactiveness. Hopefully Formula E can build on this success this season,” says Lance Fraenkel, vice president and head of sports data products at SMG.

Interactive elements include the "fan-boost", which gives the three drivers rated the most popular on social media a temporary boost in power in each ePrix race.

SMG Insight also cited the arrival of Jaguar on the Formula E starting grid in the 2016/17 series as a major factor in helping increase "positive chatter" around the sport.

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All the major car manufacturers are slowly getting involved in Formula E with Nissan joining the circuit for the next series, which starts in December. Mercedes-Benz and Porsche enter in the 2019/20 season.

“Formula E was linked to the launch of the new All-Electric Jaguar I-PACE and the company’s future electrification strategy," says James Barclay, team director at Panasonic Jaguar Racing.

“From 2020, all future Jaguar Land Rover model lines will be available with some form of electrification. As part of our Race to Innovate mission, we saw the opportunity in joining Formula E to take learnings and knowledge of battery electric vehicles from on-track activity and directly apply them to the development of our road vehicles, including the Jaguar I-PACE.

“The decision to join the series has since been vindicated with other premium manufacturers following suit and joining in season five.”

At the end of this year, Audi will launch its first mass production electric car, the e-tron. The German car maker, which has around 250 people at its motorsport division, was already involved with the ABT Sportline team but for this season took ABT's place on the grid.

Audi now has 20 people dedicated to Formula E alone and a valuable collaboration with hi-tech parts supplier Schaeffler.

“There are other manufacturers getting involved to promote electrification and transfer the technology from the race track to production and it was a good marketing opportunity," says Mr Summerscale.

“The whole concept of driving has changed and it’s about being a mobility provider. That’s the new concept.”

Taking part in Formula E is a natural progression for car makers looking to electrify their models, which in turn boosts the sport’s profile.

“The big-name car manufacturers are a big asset to the overall value of the series. It needs the credibility they bring," says Richard Gillis, managing partner of Cake, a unit under the Havas sport and entertainment agency umbrella.

“They help tell the story that Formula E is a testing ground for the future of the car. If Formula E normalises the electric car for a mass audience, then it will be money well spent for the manufacturers.”

In a report titled FIA Formula E Championship Valuation and Sustainabilty, EY argues: “Formula E will help breakdown the current barriers preventing the expansion of the EV market contributing to the additional sale of up to 77 million electric vehicles worldwide by 2040.”

In addition, EY says collaboration between Formula E, motor manufacturers and broadcasters could result in an extra €142 million (Dh647.2m) of profits generated in the car industry and 42,000 permanent jobs created in the sector worldwide. It could also lead to savings in healthcare costs and increased productivity from pollution reduction amounting to €25 billion.

Another reason for major car manufacturers to get involved is that the series is targeting a different audience to F1.

The decision to allow the races into the centre of cities such as Marrakesh in Morocco provides a unique appeal. “The role of cities is a big advantage to Formula E over F1,” says Mr Gillis. “Cities are where younger people live and where cultural relevance happens. It's where the zeitgeist is.”

The increase in car sales, as well as the presence of Formula E in host cities, will lead to tangible local and global economic, social and environmental benefits, EY says, with each host city's economy benefiting by €10m for each Formula E race held.

In its recent Commercial trends in Motor Sports report, the market researcher Nielsen argues that Formula E uses social media far better than traditional race promoters, which – combined with the city centre locations – is also attractive to sponsors.

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“Formula E’s target of boosting the use of electric cars in city centres is an example of the vehicle they’re using to carry Formula E’s brand messaging and values," says Samantha Lamberti, vice president consulting for the UK and Ireland at Nielsen Sports and Entertainment. "The use of electric cars is linked to innovation, future thinking, smart technology, sustainability, well-being, respect for the environment and longevity.

“For traditional fan bases, it’s a way to engage through activities they’re perhaps not used to. It helps to stimulate curiosity and a motivation to embrace a new sport. While these kinds of activations may be becoming increasingly mandatory for younger generations, it does not revolve around them exclusively.

“It is a new generation of activations which does attract a more tech-savvy audience quicker – but not in isolation," she says. "It allows fans to feel part of the sport, to elevate them from not just being spectators, but actors on stage and a part of the fabric of the sport itself. “

Formula E also offers naming rights to individual races and the likes of Antofagasta Minerals signed up for the Chile race on February 3, but this season the series also signed a title sponsor.

In January, Swiss engineering giant ABB entered the EV-charging market in 2010 and has since installed more than 6,000 fast chargers around the world. The agreement with Formula E was the first title deal for any Federation Internationale de l’Automobile (FIA), the world governing body of motorsport, single-seater championship.

Formula E chief executive Alejandro Agag called it "an historic day" for the series he founded in 2014.

"This is probably the biggest announcement that Formula E has made ever," Mr Agag told CNN Sport at the time the deal was announced.

"We share the same goals. ABB is a company that is focusing on new technologies that are going to transform mobility in the world, and that's what we want to do."

"Our two companies are synonymous with pushing the boundaries of what is possible," he added

Swiss private bank Julius Bar, meanwhile, has been the global partner for Formula E since the first series but the decision by upmarket clothing brand Hugo Boss to sign up on the eve of the current series, as official clothes supplier was a surprise.

Hugo Boss had previously sponsored Mercedes and McLaren in F1, but announced in November it was quitting the series for Formula E. “As a fashion brand, we are always looking at innovative approaches to design and sustainability,” Hugo Boss chief executive Mark Langer said at the time. “When we first encountered Formula E, we immediately saw its potential.”

The sponsorship was activated at the Formula E race in Hong Kong at the start of December, when Hugo Boss sent out its global brand ambassador and former F1 world champion Nico Rosberg. “It is a bit of trailblazing on their behalf so it is good," he told the FIAFormulaE website. "They are early movers ... It is a bit of a message they have sent out. All the best brands in the world are here fighting each other."

Formula E also has 11 official partners from famous brands such as Allianz, BMW, TAG Heuer and Visa, to other less well-known sponsors like power firm Enel. Each signs up for a specific deal - so DHL, for instance, is the logistics partner, Qualcomm is technology partner and Michelin is the tyre partner.

More look likely to join. “There’s still opportunities to expand in different sectors that aren’t already covered,” says a spokesperson for FIA Formula E.

The link between all these sponsors is prestige and technology – and also the opportunity to get involved in a rapidly growing sport at the outset.

“Formula E is cheaper and less cluttered in terms of the number of brands currently in the sport," says Mr Gillis.

"The technology story at the heart of Formula E feels more about the future than the past. Increasingly, Formula E is building its own identity, encouraging a 'them or us' decision from partners. They are separate entities, offering two separate stories.”

SMG Insight will be measuring the global progress of those two stories as the group is expanding its index further afield to cover 32 countries around the world including the UAE, USA and China.

Formula E will be a staple part of this new global index as the sport continues to challenge F1 both on the track and in terms of sponsors.