Remember all that kerfuffle at the end of season two, when Dragon Racing went to the FIA Court of Appeal to try to wrest third position in the championship from DS Virgin Racing? Thought it was all for bragging rights? Think again. That decision was worth a cool €400,000.
The financial side of Formula E is, like many other top-level motorsports, shrouded in mystery and surrounded by rumour. Driver salaries, team operating budgets, tech development budgets, race hosting fees – these are all kept firmly under lock and key.
We’ve done some digging and we’re now able to reveal the prize money structure in Formula E for the first time – and, by extension, how much teams earned in season two.
Each championship point is awarded €3,700 at each race. How this is split between driver and team is left to the contract discussions between those parties; it is not dictated by the sport’s organisers. We do know that, in at least a couple of cases, up to 50% of the points prize money earned is taken by the respective driver at each race, over and above their salaries.
To put that into perspective, a race win would attract a €92,500 purse. If a driver was to earn around half of that as a bonus, he would walk away with an extra €46,250. Not a bad day’s work, especially when many Formula E drivers race in other series too, such as WEC, Blancpain or DTM. Some have held reserve driver roles in F1 and others have been TV presenters on their weekends off.
It is also worth pointing out that there are almost no pay drivers in Formula E – that is, drivers who bring big sponsors with them to cover the cost of their salary. We know of only two drivers who are there specifically because team sponsors wanted a driver of that nationality, but that’s still not quite the same thing.
(We know there was an entry fee of €50,000 per team in the first season, but there was also reportedly a waiver: if a team employed a driver from the “drivers club” programme, that was said to have carried a €50,000 incentive, essentially granting the team a free entry. We were told at the time that some drivers were earning around that amount too as a salary, while others were said to command fees nearer four times that for the first season. We estimate that salaries for the most successful and the longer-serving drivers are confortably now into the hundreds of thousands, before bonuses.)
At the end of the season, prize money is awarded to the top three teams: €1million for first place, €600,000 for second and €400,000 for third.
Using these numbers, we can calculate how much teams were awarded in season two, shown in the below table.
|Team||Points||Points prize money (€)||Total prize money (€)|
|ABT Schaeffler Audi Sport||221||817,700||1,417,700|
|DS Virgin Racing||144||532,800||932,800|
As with any other motorsport, the money earned in prize revenue is not sufficient for the team to make a profit with that alone. Renault, for example, reportedly spent around €8million on development and manufacture of its season two powertrain.
Operating budgets are hard to get a handle on but are thought to be around €10million a year (this varies; teams such as Renault and DSVR have a lot of staff at and away from the track, whereas teams such as Mahindra and Techeetah operate with much tighter squads. A look at NextEV’s twin trucks at testing and double-deck garage in Hong Kong gives away a few other clues about spend levels).
Renault bosses insisted they spent no more than around €4million on their season two powertrain; even at that figure, it’s easy to see how the season would still result in a deficit of upwards of €12million, which would need to be made up through sponsorship and, more likely, Renault’s own pockets. (Renault, of course, sold powertrains to Techeetah in season three; this deal is thought to be worth around €1million.)
Despite some powertrains being relatively similar in season three to those in season two (notably at Renault and ABT) and therefore requiring less development spend, budgets are skyrocketing across the board. Seasons three and four have very similar tech regs; some teams have spent considerable amounts to edge closer to the performance seen at Renault, and they all continue to spend to find small improvements for season four.
Season five is where there will be a significant step forwards in tech, with the reduction from two cars per driver to a single car each. Battery weight is likely to increase, which means constructor teams need to find even more innovative ways to design and package their drivetrains.
For companies such as Renault, Jaguar, BMW and Audi, this kind of expenditure does make sense when viewed in the light of research and development. The stresses that batteries, inverters and motors are put through in a Formula E season are far and away beyond those ever experienced by a road car, so this learning feeds directly back into those companies’ electric and hybrid road car development programmes and will be used to improve the electric cars on our roads tomorrow.
Formula E did set out to cap budgets to attempt to retain a level playing field between all teams but, with OEMs of this size on board, that was always going to be impossible to police. Instead, the tight rein on regs and the common chassis will help ensure competition remains entertaining while also allowing tech development and a sustainable model for all parties. As we’ve seen with Jaguar’s slow entry to the sport, getting Formula E right is no easy task and is certainly not just about the money.
In the meantime, those drivers who continue to pull double duty in Formula E and other high-level sports, such as WEC, are not doing too badly when it comes to wages. Considering the sport is so young, that bodes well for future earnings for them and makes a strong case for young drivers to target Formula E as a viable place to spend their careers.