BYD is already studying entering Formula 1, according to Bloomberg. And it is not a whim, it is a necessary step

To understand a leak you have to imagine (or be clear about) who is behind it. But also how and when the information has been leaked. And in this case, of course, there is little that is coincidental. BYD is studying its entry into Formula 1, according to Bloomberg.

In the week in which Formula 1 arrives in China and the sport seeks new markets.

The rumors. BYD is studying its ability to compete in Formula 1 and/or the World Endurance Championship (WEC) according to Bloomberg. The media outlet points to “people familiar with the matter,” who point out that the company calculates how much money an investment could take where no success is guaranteed.

For the information of Bloomberg It seems that internal investigations would be in their early stages. And the media points out that there would be two possibilities, from creating your own team to buying one already on the grid, a more common option.

Because? On BYD’s side, the reason is clear: trust. The company needs to open up to new markets but, in addition, its plans for the next five years include a rapid expansion. The company has also seen how its sales have collapsed in China and there are those who anticipate a stagnation in sales if the State does not return the purchase aid of recently recalled electric cars.

Entering one or both of the competitions would give the company a layer of credibility and confidence in the face of possible new competitors. Competitions continue to be a huge laboratory where solutions and ingenuity can be developed that can then be applied on the street, but they also help create history and brand image.

Chinese companies need a boost in this last sense to give credibility to their proposal. At the moment they are doing it by following all the challenges that traditional manufacturers once set themselves. That’s why Xiaomi has sought its own record at the Nürburgring. That’s why BYD boasts of having the fastest car in the world. Jumping into competition is only a natural step in strategy.

Formula 1. Why would BYD be interested in Formula 1 when the championship is not going through its best moment? For several reasons:

• With the change in regulations, the battery and electric motors are more important than ever. Right now, the type of motorization is aligned with a proposal with which BYD can take advantage on the street.
• Despite criticism, it remains the queen category of motorsports. Neither the World Endurance Championship (except the 24 Hours of Le Mans), nor the World Rally Championship, nor Formula E, nor the American competitions (Indycar or Nascar) attract so many viewers to television.
• Formula 1 has gained enormous weight among young people in the United States. Your documentaries Drive to survive They have increased interest in a population group that may be interested in their vehicles. The country also already organizes two Grand Prix, which would serve as a showcase where, at the moment, they cannot sell their cars.
• Formula 1 aims to once again attract the Chinese public. This weekend F1 returns to Shanghai, which has been sowing the seed since 2004 (with the 2020-2023 break due to the Covid-19 crisis). If Formula 1 is interested in gaining followers in the country, BYD would be a great tool.

And the problems? The problems for BYD are also several and almost all of them are linked to the fact that it is impossible to guarantee the return of investments in competition in terms of success. And it is difficult to measure its social impact in the short term.

• Bloomberg points out that a year in a championship like Formula 1 or the WEC is equivalent to investing about 500 million euros.
• The company does not have a previous competition structure. That leaves two possibilities: create it from scratch with inexperienced engineers or buy existing equipment. Neither option is cheap.
• The future of Formula 1 is uncertain. The current regulations do not convince either drivers or fans. Some teams even supported freezing the change or not giving so much weight to the batteries and others like Audi, which had already made the investment to enter it, refused. The doubt is whether the sport will maintain the current rules as they are or if they will move away from a proposal that fits with BYD’s philosophy.
• Just as BYD has a lot to gain in image, it can also lose it. Both Formula 1 and the WEC are dominated by Western teams, failing could mean a step back in the communication strategy.

The WEC. The World Endurance Championship could be a logical and alternative option to Formula 1 that seems to have fewer risks. The organizers seem willing to open their hand with the type of motorization used, so there are not so many regulatory restrictions in that sense. This has once again attracted brands such as Ferrari, Aston Martin, Lamborghini, Ford or Genesis (Hyundai).

In addition, it would allow him to grow and gain experience without having so many spotlights on him. Endurance races are an excellent opportunity to test the reliability of advances that can then be replicated to a greater or lesser extent on the street. A success would be excellent publicity and a failure would not attract as many eyes.

Photo | BYD and Drew Bates

In Xataka | From BYD to Xiaomi: all the Chinese cars that are already sold in Spain, Europe and those to come