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Formula E is on track financially, with NYC race coming up

LONDON - Formula E could be breaking even already were it not investing for the future, chief executive Alejandro Agag said on Monday after the electric motor racing series reported continuing losses in its latest annual accounts. Accounts filed at Companies House showed Formula E Operations Ltd reduced its operating loss to 33.7 million euros ($38.32 million) at end-July 2016, a period covering its second season, from a previous 62.7 million. Net liabilities rose to 107.2 million euros from 72.1 million, while total revenues reached 56.6 million from a previous 19.7 million. "Everything is going according to plan," Agag, whose city-based series will be racing in New York for the first time on July 15 and 16, told Reuters in an interview at his London offices. "Actually we are doing incredibly well financially according to our plan. "We could have broken even this year but we decided to invest more in marketing and promotion. We decided to add races like the one in New York, which is in year one a race which is costing, we have significant capital expenditure." "It's really up to us when we want to go to break even or not. We could be in break-even now, we could be in break-even next season but we may decide to invest more in marketing and promotion." Agag said the shareholders, including John Malone's Liberty Global and Discovery Communications, were supportive of the strategy and the series had attracted more investors, sponsors and car manufacturers. The New York races will be held in Brooklyn's Red hook neighborhood, with lower Manhattan and the Statue of Liberty as a backdrop with technology partner Qualcomm securing the naming rights. MANUFACTURER INTEREST Agag, whose series plays down competition with Liberty Media-owned Formula One, said more carmakers were set to join a series increasingly aligned with their commercial focus. "I think Formula E has become the preferred destination for manufacturers and there are a few reasons for that," said the Spaniard. "Obviously, one is that it is electric and manufacturers are more and more focusing on electric cars...and we are the only platform really to help them promote that technology and those types of cars. "And second, because of the cost. The cost of the team in Formula E is very moderate." Whereas top Formula One teams can burn through $300 million a year, as can the likes of Toyota in the World Endurance Championship, the budgets of successful Formula E teams are between 10 and 15 million.

The real reason Audi races

The world has watched Audi have its way with endurance racing since 1998. What started as an intriguing race winner in 2000 that could be rebuilt so quickly that the ACO oversight organization changed the rules to slow Audi mechanics down, slowly morphed into a unique assassin, employing novel engineering methods to achieve series domination with its R18 E-Tron Quattro. Until recently. It's strange, then, that for all these years we didn't fully comprehend Audi's stated approach to motorsport. And so we sat down with Dr. Wolfgang Ulrich, head of Audi Motorsport, and Chris Reinke, head of Le Mans Prototype development while in Austin, TX, for the Lone Star Le Mans and World Endurance Championship race for answers. BMW, Corvette, Porsche, and Ferrari have healthy reputations, lucrative option sheets, and supported a robust trade in special editions by winning races. They have standalone racing divisions and they transfer the entire sheen of their racing endeavors to their road cars, a healthy part of what their customers buy into. Even though we know they improve their road cars with lessons learned racing, the belief is that they race because that's just what they do; those brand names mean racing. "Not one single euro is spent on a separate motorsports program." Yet Reinke said that for Audi, "Not one single euro is spent on a separate motorsports program. We [Audi Motorsport] are part of the Technical Department [of the road car company]. We are a pre-development lab for road-relevant technology." As in, Audi isn't racing out of core philosophy, it's racing only to improve its road cars. That helps explain why Audi's entire road car lineup doesn't bask in the same racing aura as those other brands even though Audi has been racing since it was called Horch. It's not a racing brand, it's a technology brand. Said Ulrich, "Instead of components, look at technologies – not lights, but lighting technologies, not engines, but engine technologies, like injection pressure technology is the same from the race car to the road car." That's nowhere near as exciting as, "Win on Sunday, sell on Monday," but it is arguably much more practical. Quattro is the most obvious example of racing tech for the street. For a less obvious one, Reinke said, "Audi Motorsport developed codes for computational fluid dynamics, and then we'd run the calculations on the Technical Department computers at night.

Watch Audi R8 give Birth to RS3

In the cold light of reality, it's a fairly dubious proposition to suggest that the Audi RS3 Sportback shares much of a mechanical relationship with an R8. One of them is supercar with a snorting V10 and lithe body, while the other is a still-capable hot hatch with roots lower in the brand's range. However, marketing doesn't necessarily have to sell real life, and Audi's advertisers are nailing the emotional pull of these two models in a spot called Birth. With dramatic music and a sci-fi aesthetic, the R8's V10 roars as the supercar stretches and deforms, and eventually the hot hatch gets plucked from its metallic loins. Regardless of how closely these two models are related, this commercial looks and sounds fantastic. With the US rumored to get the RS3 in sedan form at some point, hopefully we get a tweaked version of this ad.