Renault, lacking results, could leave F1 as early as 2021

Few sports results:

Since its return to Formula 1 in 2016, Renault has certainly made progress in the standings, but has not yet managed to compete with the top teams like Mercedes, Ferrari, and Red Bull. This is a very disturbing situation for one of the world’s largest car manufacturers, which is competing in the championship against teams with much smaller budgets.

2016: 9th with 8 points

2017: 6th with 57 points

2018: 4th with 122 points

2019: currently 6th with 43 points

At the engine level, performance is gradually improving. But at the beginning of 2019, the Renault engine was the weakest in terms of power. As for the chassis, the observation is similar since McLaren, which is the customer team, beats the factory team.

This 2019 season has been very complicated for the yellow and black single-seaters. After finishing 2018 in the coveted position of best of the rest, expectations for this campaign were very high. And obviously Renault is not going to meet them. 6th in the constructors’ standings, they are 8 points behind Toro Rosso and 39 behind McLaren, who hold 4th place in the championship. Such a deficit at this stage of the season is almost impossible to make up.

At first glance, on a sporting level, Renault has many reasons to leave Formula 1. It is one of the teams with the biggest budget on the grid, yet it battles with Toro Rosso and Racing Point. After 4 seasons, the diamond brand has established itself as a mid-field team but not at all as a team capable of competing for victories or even a podium.

It should be noted, however, that Mercedes, currently at the top of the constructors’ standings since 2014, went through 5 seasons before achieving this performance. Renault might therefore go all out next year.

Costs higher than revenues:

Like any sport as highly publicized as Formula 1, astronomical sums of money are at stake. Renault is financially supported by the Renault Group, primarily with the aim of providing an international showcase, and thus can overnight decide that if the interest is lower than the cost of the structure, to cut investments.

Revenues directly related to F1 include sponsors as well as television broadcasting rights distributed by Liberty Media. Renault received nearly 50 million Dollars from Liberty Media in 2017, while at the same time, the team cost 342 million. That’s 192 million Dollars to find, and these expenses will likely increase in the coming years with significant regulatory changes expected for 2021, while revenues themselves are not increasing. After the 1 billion euros invested in V6 hybrid engines, it’s uncertain whether the Viry-Chatillon structure is ready for a second such large investment.

Cyril Abitboul, director of the French team, recently explained that the team must self-finance. When signing new contracts, two required conditions for Renault are already on the table: the budget cap and better distribution of TV resources are already accepted. But that’s not enough for us.

A complicated media coverage:

In recent months, the Renault Group and then the Renault-Nissan Alliance have been highly publicized, and not necessarily in a positive light. The controversy surrounding the embezzlement of funds by Carlos Ghosn, the former CEO of the Renault-Nissan Alliance, has significantly impacted the Group’s results, which could decide to refocus on the essential, namely selling cars. It is known that Renault’s new director and former CEO of Michelin, Thierry Bolloré, has confirmed his commitment to Formula 1. However, we can imagine that the investment it represents will likely be in jeopardy if the group’s position does not improve in the coming months.

22 million in the trash:

Renault very likely missed out on 22 million dollars. A significant amount representing a clause in the contract that Renault signed with Bernie Ecclestone at the time of the sale of Formula 1 to Liberty Media. The French team had to win at least 22 races and 2 championships in 5 years to achieve this bonus amount of 22 million dollars. An unachievable target given the team’s performance. A sum less to add to the team’s deficit.

« By negotiating the sale of F1 with Liberty Media, Bernie Ecclestone offered Renault a bonus of 22 million dollars if they secured their place in F1 once acquired by Liberty Media. The condition to receive this amount is to win 2 consecutive championships and a minimum of 22 races. » comments Christian Sylt.

It should be noted that Renault’s communication at the moment does not clearly go in this direction. The manufacturer is one of the few to have accepted the 2021 agreements. While for the moment no official statement has come to question Renault’s position for 2021, it is strategically interesting to think that a withdrawal is currently a stronger possibility than maintaining. And what about the fans’ interest in all this?