Without question, the modern era of the most famous race in the world—the 24 Hours of Le Mans—has belonged to Audi. That comes to an end this year. This is the way things had to go.
Today Audi announced that after 18 years, including 13 victories at Le Mans, that it would withdraw from the World Endurance Championship to focus instead on the newcomer all-electric spec series Formula E—a relatively obscure effort in the global world of racing.
Despite the fact that Audi’s departure was perpetually rumored, the fact that they actually did leave was, if you’ll excuse the electricity pun, shocking news. It was as if Ferrari decided to leave Formula One for a regional dirt track series in the American South.
Audi defined modern endurance racing, and Audi certainly allowed itself to be defined by its successes there. If you’re an automaker, that’s kind of the entire point. Audi’s victories in racing were tremendous for its brand. It scored the first Le Mans win for a diesel, and the first for a hybrid. Black, silver and red cars raced around the world (very notably here in America) adorned with the brand’s TDI logo and brought home the glory for Audi’s diesel technology.
But Audi’s parent company, the Volkswagen Group, has for the past year been facing costs in the billions of dollars thanks to a global diesel emissions cheating scandal. It has forced a strategy shift at the group and at Audi in particular toward electrification. It has meant reduced costs and finding a new focus.
And sadly, Le Mans racing in its current form doesn’t work.
You have to dig past the massive Dieselgate recall, settlement and lawsuit headlines and look into what Audi considers the post-diesel future: electricity. In order to move past being the cheating, polluting, not-so-clean diesel brand, Audi (and Volkswagen) are betting big on hybrids and electrics, like a German Tesla, except one that presumably meets its deadlines. The first all-electric Audi, an SUV called the e-tron, is due out in 2018.
But making a massive shift toward electric technology is expensive. It’s going to require significant retooling and R&D costs. This summer Reuters reported Audi will shift about a third of its $4.69 billion (in 2015) R&D budget toward electrification. This, around the same time the Volkswagen Group is out $14.7 billion in a settlement with U.S. diesel owners alone—and that’s just one of the many, many costs associated with Dieselgate.
In other words, Audi needs money to pull off this electric revolution. For Volkswagen in general, that has meant cutting the excess and ridiculousness that defined the company under former boss Ferdinand Piëch, and paring back unnecessary, overlapping models and programs.
It’s believed Audi spent somewhere between $200 million and $300 million on its LMP1 racing program alone each year. It probably doesn’t help, either, that Volkswagen stablemate Porsche wasn’t just also running a massive LMP program of its own, it had won Le Mans, too. The last thing most profit-based corporations need is not one, but two massively expensive racing programs. Especially if they’re competing against each other.
Formula E teams cap their budgets at $3.5 million a year. If Audi is going to cut, that’s a logical place to start.
One of the best things about Le Mans and the WEC, especially in the top LMP1 class, is that it’s the tip of the technological spear for automakers who compete. It’s the best of the best on display, full of tech that may somehow trickle down to street cars.
Starting with the R10 TDI a decade ago, Audi’s LMP1 cars had all been diesels, followed by diesel-electric hybrids later on. They were the flagship of the TDI diesel family, a way of saying to the world, “Here’s how powerful and reliable and efficient our diesels can be.”
Needless to say, that’s a bad look today. Diesels from the Volkswagen Group are dead in America, probably forever. And while diesels dominate other markets, much of that success has been thanks to loose regulations that are now tightening up across Europe.
Diesel is on the way out. The TDI cars had an amazing showing at Le Mans, but by now, at the end of 2016, they had become a thing of the past, not the future.
This brings us to FIA Formula E, a scrappy all-electric racing series that’s only in its third year. It’s possible Formula E has the potential to be a huge deal someday, but it’s not there yet: not in the speeds of the cars, not in the drivers, not in how it makes money, not in attendance numbers or even in access to tracks—so far FE only races on street circuits. This is a pretty far cry from Le Mans, the greatest racing spectacle in the world.
But electrification is the future. And the auto industry, with the motorsports business that support it, has to start somewhere.
Audi has been involved with the sport since the beginning, but mostly as a sponsor with the ABT Team. Earlier this year Jaguar, another famous brand in Le Mans history, announced that it would compete in Formula E as well. It was a nice score for the nascent series. As The Verge notes, Renault, Mahindra and others also run teams in the series, and Mercedes-Benz plans to join in 2018, as does Chinese-backed car company (?) Faraday Future.
But Audi, coming as a full factory effort now from all that Le Mans experience, is FE’s biggest get so far.
Here’s what Audi board member Rupert Stadler said about the brand’s entry into the series:
“We’re going to contest the race for the future on electric power,” says Stadler. “As our production cars are becoming increasingly electric, our motorsport cars, as Audi’s technological spearheads, have to even more so.” The first all-electric racing series perfectly matches the strategy of offering fully battery-electric models year by year starting in 2018, Audi currently being in the greatest transformation stage in the company’s history.
The commitment in FIA Formula E will already commence in 2017. It is regarded as the racing series with the greatest potential for the future. That is why Audi has intensified the existing partnership with Team ABT Schaeffler Audi Sport in the current 2016/2017 season. On the road toward a full factory commitment, the manufacturer is now actively joining the technical development.
For now, as fledgling as it is, Formula E is all we have, in terms of electric car racing. Or at least the biggest. There are some smaller spec series and grassroots efforts, but FE right now is the major effort. If Audi wants to race electric cars at the top level, it gets in while that—like electric cars themselves—are still growing.
Had Audi had an unlimited budget and wanted to still take its electric game to the next level, it could somehow run an all-electric prototype in Le Mans. They don’t have that kind of money. They do, however, have Formula E money, which is incredibly convenient for them.
While Audi’s wins at Le Mans made the brand and its cars look good, it’s always been questionable whether racing wins actually translate into car sales. But if you’re going to perform, the top echelons of racing are the place to do it.
With Formula E Audi keeps a foothold in racing besides the DTM and the various other places its cars can be seen getting flung around a track at speed, but it’s nowhere near the profile that Le Mans was.
At any rate, the end to racing in Le Mans may just be the biggest casualty of Dieselgate yet.
Correction: An earlier version of this story said Formula E is in its second season. It is in its third season.