In his capacity as a Columnist for California Sports Lawyer®, Founder Jeremy Evans has written a column about whether Tesla should enter into Formula E for electric vehicles and the racing circuit.
You can read the full column below.
Would Tesla ever enter the Formula E circuit? YouTube is full of videos showing the power of electric vehicles, namely Tesla, going against gas combustion engines of the Lamborghini and super car variety, and Tesla usually wins or competes competitively. The Tesla S Plaid edition is a very fast car and runs 0-60 MPH between 1.98 and 2.28 seconds. A Formula 1 (“F1”) car runs 0-60 MPH in 2.6 seconds. Obviously, there is a stark difference between the braking and cornering of each vehicle, with F1 vehicles holding the advantage.
However, Porsche is doubling down with its Mission R concept electric vehicle (“EV(s)”) for the Formula E and GT Series circuits, while Bentley, Ferrari, Lamborghini, McLaren, and Nissan all have plans for EVs of their own. Porsche also controls 45% of Bugatti with Rimac owning 55% of the iconic luxury and racing brand. Tesla has an opportunity to enter into the space, but will the brand make the move?
There were some initial and possibly remaining questions around the cost savings and viability of electric racing in its infancy, but in just its fourth year Formula E became profitable. In addition, the partnership between F1 and Netflix’s Drive to Survive has also increased the popularity of the sport exponentially. The issues with EV racing remain though: how long can a race last without a charge and the level sustainability with electricity still requiring other power to run.
Tesla, like any car manufacturer, will have concerns over public relations with a crash or lack of performance on the track. Of course, Ford faced those same concerns displayed in the feature film Ford vs. Ferrari (2019) and it led to the iconic Ford GT and victory lane. Then again, Audi and BMW have cited a lack of development from the racetrack gearing towards mass vehicle consumer production. It may be too early to tell success, but electric vehicles do seem to be the wave of the future.
Tesla will sponsor Formula SAE student development circuit teams with discounted hardware and free battery cells, but Tesla is not currently a corporate sponsor in any other form of racing and it does not have an official vehicle in a circuit—let alone any vehicle. Tesla CEO Elon Musk has certainty considered the option, but it may be too soon in the growth of the company. Musk himself a great marketer in genuine form, could benefit from the exposure and potential dominance in a traditionally gas-powered industry.
As F1 considers its expansion into new geographic locales, would Tesla not be a great leader in that drive? Tesla has transformed the EV space from concept to mainstream and it continues to grow in popularity. With new F1 races coming, America and the iconic roads, particularly in California, seem like prime racing and marketing opportunities.
The reality is that challenges lead to learning and growth. For Tesla to compete, it would need to work on battery life, while the racing circuit would need to work on the proper race length. The issue for Tesla is that it is an EV company only. Tesla does not manufacturer gas combustion engines. Whereas other competitors do, so bad publicity about a Tesla vehicle might lead to larger concerns. The last point might be the foremost issue on Musk’s mind as Tesla considers entering the racing circuit.
Tesla may have more pressure on itself to perform because it is solely in the business of EVs. People and the press will expect more out of Tesla because they are by far the industry leader in EVs. Tesla also has the most to lose by not entering the EV racing circuit, namely Formula E. Imagine competitors winning in the racing space only to see new technology go to competitor vehicles through research and development from the shop and track. Imagine, from a marketing perspective, a mainly combustion engine competitor pilling up awards in an electric vehicle racing circuit where Tesla does not even have a presence.
The truth is, Tesla needs competitive racing as much as the racing circuit needs Tesla. Tesla’s knowledge and brand will help drive innovation. Tesla’s existence in the racing circuit will also help Americanize F1 racing and the grow the popularity in NASCAR as stock car owners explore development of an electric racing car.
About Jeremy M. Evans:
Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clientele in contractual, intellectual property, and dealmaking matters. Evans is an award-winning attorney and industry leader based in Los Angeles. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.
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