Ford Is Returning To Formula 1: Here Are The Details And Why It Could Help The Company

After more than 20 years out of the sport, Ford Motor Company F is returning to Formula 1 racing. Here’s a look at why the time is now for Ford and how it could help the automaker's push into electric vehicles.

What Happened: Ford announced it is partnering with the Red Bull Racing team to rejoin the Formula 1 sport. Red Bull Racing has had the back-to-back winning driver of Formula 1, a league owned by Liberty Formula One Group FWONA FWONK. The winner of the last two seasons was Dutch driver Max Verstappen.

“We don’t go racing just as a marketing exercise,” Ford said.

The company noted that the growth of Formula 1 in the U.S. and around the world along with more sustainable approaches from the league were big factors into re-joining the sport after 22 years away.

“We saw what was happening to the sport itself, with the popularity, the growing global fanbase, and diversity of that fanbase, (which) would then give us a platform to tell our story,” Ford Performance Motorsports Global Director Mark Rushbrook said.

You're not dreaming. It's real. We're back in #F1, partnering with @RedBullRacing 🏎� #FordReturns pic.twitter.com/NSLBJ9kQSz

— Ford Performance (@FordPerformance) February 3, 2023

As part of the deal, Red Bull and AlphaTauri will race with newly developed Ford engines for at least five seasons from 2026 through 2030.

“(Ford’s interest) started two-plus years ago, when we started to see and understand what the future of the sport was with the technology changes, the commitment to sustainable fuels, the net carbon zero and the change to the technical regulations to make electrification an even bigger component of the hybrid power unit.”

Ford previously ran its own team and also contributed engines to teams. This time around, Ford decided to partner with Red Bull Racing.

The new power units will be labeled as Red Bull Ford. Ford will initially focus on battery cell technology, electric motors, controls and software, but could expand to additional areas.

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Why It’s Important: While Ford said this is not strictly a marketing move, investors should be aware of the marketing opportunities for the legacy automaker.

There will be a record 24 Formula 1 races in the 2023 schedule, including three taking place in the United States, the country with the most league races. Miami, Austin (Texas) and Las Vegas will all host Formula 1 events in 2023.

“It was the opportunity for marketing, and connection with diverse fans globally, but yes, the specific growth in the U.S. certainly contributed to that – but it wasn’t the only reason,” Rushbrook said.

Those who are familiar with Ford CEO Jim Farley shouldn’t be too surprised by Ford's move to get back into Formula 1. Farley has raced cars for years in endurance races and at local racetracks in California. When he became CEO of Ford, Farley got Ford Chairman Bill Ford to sign off on a waiver to allow the new CEO to continue to race cars as long as he was safe.

In an early marketing push, Farley was featured alongside Formula 1 driver Sergio “Checo” Perez, who finished third in last year’s standings. The duo appeared alongside Tonight Show host Jimmy Fallon and raced go karts while highlighting the new Formula 1 partnership.

“I like racing,” Farley said.

Farley pointed out that Ford will utilize the partnership to help promote its electric vehicles. The Ford CEO also remarked on the tremendous growth of the sport, particularly in the United States.

Television viewership for Formula 1 was up in 2022, including a record-breaking 2.6 million viewers on ABC for the first ever Miami Grand Prix, which set the high mark for a live U.S. television audience viewing a Formula 1 race.

ESPN, a unit of The Walt Disney Company DIS, signed a new television rights deal with Formula 1, worth an estimated $75 million to $90 million per season, up significantly from the previous $5 million per season deal.

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