Russian F1 Grand Prix, Sochi Autodrom, Sochi, Russia on September 26 2020, with Honda-powered Red Bull's Max Verstappen during practice. Picture: REUTERS/MAXIM SHEMETOV
Russian F1 Grand Prix, Sochi Autodrom, Sochi, Russia on September 26 2020, with Honda-powered Red Bull's Max Verstappen during practice. Picture: REUTERS/MAXIM SHEMETOV

Tokyo — Honda Motor will conclude its participation in the Formula One (F1) World Championship at the end of the 2021 season as the coronavirus pandemic dents car sales and the automotive industry undergoes a seismic shift towards electric vehicles (EVs).

The Japanese carmaker supplies engines to Red Bull Racing and Scuderia AlphaTauri. It bowed out of world’s most-prestigious automobile racing series once before, in the wake of the global financial crisis, but resumed competition in 2015 with the goal to win using its own energy management technologies.

“As the automobile industry undergoes a once-in-one-hundred-years period of great transformation, Honda has decided to strive for the realisation of carbon neutrality by 2050,” it said in a statement on Friday. “Towards this end, Honda needs to funnel its corporate resources into research and development into the areas of future power units and energy technologies, including fuel cell vehicle and battery EV technologies.”

Like its peers around the globe, Honda has been hard hit by the pandemic that shuttered showrooms and production sites. The company posted a loss for the fiscal first quarter through June, and predicted full-year earnings that trailed analysts’ estimates.

President Takahiro Hachigo said the company had been mulling exiting the race after it was postponed in 2020 due to Covid-19. It informed Red Bull in August and made a final decision at the end of September, he said in a media briefing Friday.

“It’s a realistic decision,” Bloomberg Intelligence analyst Tatsuo Yoshida said. “Honda has made a logical decision instead of just pursuing its dreams. The situation has changed, and Honda itself had to change.”

Honda became involved in F1 more than half a century ago, and has competed as an entrant, constructor and engine supplier, scoring multiple championships in the most watched motorsport competition on the planet.

The carmaker said that as part of its greater focus on new technologies, it created a centre called “innovative research excellence, power unit and energy” in April.

“Honda will allocate its energy management and fuel technologies, as well as knowledge amassed through F1 activities, to this area of power unit and energy technologies and take initiatives while focusing on the future realisation of carbon neutrality,” it said.

F1 said last week that it had recorded the sport’s biggest coronavirus spike this year as it prepared for the Russian Grand Prix, the 10th race of the season. The F1 organisation and the International Motoring Federation said they had discovered seven cases following 3,256 tests between September 18 and 24.

Other transport companies have been quitting sports deals and sponsorships too. Qantas Airways said last month that it was ending its Rugby Australia sponsorship to save cash. It also ended its financial support for Cricket Australia and the Football Federation of Australia as it cuts costs and jobs.

Bloomberg

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