How Consumers Benefit from Formula 1 Technology

We are nearing the end of Formula 1 ($BATRA) season, when prestige automobile manufacturers show off their latest and greatest feats of engineering, and million-euro plus computers disguised as cars soar down the track at over 300 km/hr.

These races are certainly entertaining to watch, but we also directly reap the benefits of innovations on the race track – these improvements eventually trickle down to the SUVs and sedans we drive.

Here are some examples of technology we commonly see today that received its start in the racing world:

• Push-button ignitions
• Disc brakes
• Suspensions
• Tire grooves
• Carbon fiber
• Roll cage

Even rear-view mirrors were first used in auto racing to eliminate the need for a second man, who used to be required to look back for oncoming traffic. Rear view mirrors eliminated the extra weight in the race car and the need for two seats.^[1] 
Today, automotive industry leaders may be interested to see what new technologies are being unveiled through Formula 1. What technologies are competitors adopting for special edition vehicles and upcoming road cars? What could potentially become standard in the next few years?

To find out, I ran the following query in AlphaSense for Formula 1 and Formula E (the 3-year old electronic vehicle race) with some development keyword terms:

(“formula one” OR “formula 1” OR F1 OR “formula e”) AND (innovation OR technology OR development)

I screened across all sources in AlphaSense so I would capture coverage by trade journals and newspapers, as well as company reports and analyst research. To narrow down the results, I used the Sectors / Industries Filter and selected Automobile Manufacturers, because I wanted information on cars rather than the microprocessors that power their internal computers.

I found mentions of the expected players: Mercedes ($DAI.DE) and Ferrari ($RACE), both have top ranked teams competing in Formula 1. Other companies, such as Honda ($HMC) and Renault ($RNO.FR), also came up as they develop engines that power the cars of other entrants.

This search revealed news about Mercedes’ unveiling its new Project One hypercar at the Frankfurt Motor Show. The limited-edition car features a powertrain based on its “championship-winning hybrid Formula One V-6 turbocharged engines.” It features a hybrid combustion engine with four electric motors that can generate over 1,000 bhp and take the car to 350 km/hr. Needless to say, that technology – at least at that power – probably won’t be found in the C Class any time soon.

As for Ferrari, while there is no explicit mention of incorporating F1 technology into any specific consumer car, there is mention of the technology trickling into the car portfolio over time. The company does, however, explicitly mention its Formula 1 team, Scuderia Ferrari, widely in its company documents, including press releases and filings, highlighting how important F1 is not only for the company’s technology, but its branding.

F1 technology and expertise really does translate to road cars. For example, Renault’s new Mégane Renault Sport, a car that competes with the Ford ($F) Focus and Honda Civic, relied on its F1 engineers to develop high performance parts to improve handling and keep parity with competitors – even though it has a relatively smaller engine .^[3] Even Subaru ($7270.JP), a name more synonymous with the suburbs than the racetrack, is featuring Formula 1 inspired Drag Reduction System.^[4]

The most interesting finding was the volume of references to Formula E, a race series that is just 3 years old. Companies that have not participated in Formula 1 have been flocking to Formula E to develop and test electric technology.^[5]

Jaguar’s parent, Tata Motors ($TTM), announced last year that Jaguar would be competing in Formula E to test its Jaguar Land Rover electrification technology. Even Porsche ($PAH3.DE), who races amplified versions of its combustion-engine based 911 GT3 in races outside of Formula 1, will be entering Formula E.^[6] And while there is no mention of Tesla ($TSLA), the leader in electric (consumer) cars in a Formula E race, a quick AlphaSense search on Tesla AND “formula e” reveals Tesla’s participation in Electric GT, a race for non-race cars.^[7] As more companies begin to embrace Formula E technology, it appears that electric cars will be the future of the automotive industry.

With a few AlphaSense searches, I was able to find information I would otherwise miss and deduce that engine technology, especially hybrid and electric, is likely where consumers will benefit from Formula 1 and Formula E.