The noisy neighbours are disrupting the disruptors.
At Formula E’s headquarters in west London there is just a thin partition that separates Formula E Operations Ltd from Extreme E Ltd staff.
The Extreme E offices, resplendent in eco-interior minimalist chic, are directly adjacent Formula E’s, so those next door can hear as well as see the giant strides being taken as the off-road electric series readies for its 2021 bow.
They are of course two organisations founded by the same man: Alejandro Agag. A man whose visions have in many ways reprofiled the motorsport landscape.
Next week he, along with former McLaren Applied Technologies boss Rodi Basso, will reveal yet another major racing project. It is sure to make further waves in the industry.
The fact that Agag and his teams have done all of this in less than a decade tells you how quickly and decisively things move when he sets his mind to something.
Neither party will ever admit it but Extreme E has, in recent months especially, become a genuine threat to Formula E’s future.
Once again Agag has got his timing spot on. This, combined with Formula E facing the possibility of its defined USP of racing in city centres being disrupted or cancelled outright for several years due to the COVID-19 pandemic, is a very real and present danger.
There is now open talk among FE manufacturers and commercial heads within them of Extreme E being a menace, particularly from a commercial perspective.
Lewis Hamilton will bring Extreme E a degree of exposure and profile that Formula E can only dream of
This is because Formula E has manufacturer entrants and partners that have entered into commercial agreements to take people into city centres. At the moment they are not able to do this. It is a big problem for Formula E, and they know it.
Come what may Formula E has to start its first world championship season promptly in 2021 and teams have recently been told that the first two events in Santiago and Mexico should be manageable even if they have to be conducted behind closed doors.
More important though is the here and now. Extreme E is moving very quickly at present and Formula E cannot afford to take its eye off the ball, which is ironic considering its CEO is a former Manchester United FC executive.
Big new Extreme E teams are being announced by the week and the confirmation that one of these will use Lewis Hamilton’s image and name has not so much moved the goalposts but also the entire pitch with it.
Hamilton will bring a degree of exposure and profile that Formula E can only dream of. Felipe Massa’s recent retreat from Formula E competition barely blipped the news pages of the world compared to Hamilton’s acquisition of an Extreme E franchise. It sent Extreme E’s media value into the stratosphere.
The good news keeps rolling for Extreme E. Yesterday Mattias Ekstrom was announced as one of the Abt drivers and that team will run with Volkswagen brand Cupra in the inaugural season.
Agag and his trusty commercial/marketing sidekick, Ali Russell, also ex of the Formula E parish, have gone to another level and deserve all of the glowing plaudits and accolades.
Not everything in the Extreme E eco-garden is organically rosy. They need all the positive PR to be banked now because the initial calendar needs amending.
Agag visited sites in the Alps last week because the Himalayan event in Nepal planned for next year will now not happen.
A spring start in 2021 also looks ambitious for Extreme E, but if Agag knows how to do one thing it is to pull off the seemingly impossible.
He spent a month living in Beijing back in the late summer of 2014. This was to ensure that Formula E was able to deliver its first race (pictured below). It happened but it went down to the final hours before the event for preparation to be completed, so Agag knows how tough it is to start a new series.
While Extreme E gets set for its debut, Formula E readies for its most crucial season yet in 2021 given the COVID-19 pandemic’s threats to its city centre existence.
Agag’s successor as CEO, Jamie Reigle, recently said that Formula E is planning to expand its calendar in the coming years.
In an interview with the German newspaper, Allgemeine Zeitung, Reigle said: “In order to become better known, we should compete more races than the 14 we have at the moment. But also not 21 like Formula 1. We have to ask ourselves in which cities it makes sense to drive.
“Germany is important, but so are Japan, China and the western United States.”
The crucial 2021 Formula E schedule simply cannot afford major disruption
Expansion into any of those new territories at the moment is fanciful. Much more pressing is how Formula E will adapt if it is unable to host genuine city centre races in Paris, Rome, Seoul, New York and London throughout 2021.
Quite apart from the logistical and operational requirements, Formula E has to try to ring-fence its partners right now. To a large extent Formula E is more reliant on its VIPs to make its commercial system function. It’s a bigger issue for Formula E because for the teams TV eyeballs is where much of the return on investment comes.
In addition, remote or virtual hospitality is only a temporary solution. This didn’t work for Formula E in Berlin. One leading Formula E manufacturer boss described that system in Berlin to The Race as ‘a catastrophic and embarrassing failure’.
The TV data, six weeks on from the events in Berlin, has not been released by Formula E. This does not usually point to good news.
So the crucial 2021 Formula E schedule simply cannot afford major disruption. But, under emergency FIA regulations expedited by the pandemic, the calendars could now be updated by the promoter and two people from the FIA, one being president Jean Todt, without having to go through the World Motor Sport Council.
Of course, as a non-FIA sanctioned series, Extreme E need not worry about such matters, and neither does it have to worry too much about the machinations of national or regional governments, at least not to the extent that Formula E does.
“The fundamental difference is Extreme E are already going to create legacy projects. The legacy project is really where you put your money where your mouth is” :: DS Techeetah’s Keith Smout
This perfect storm is paving the way for Extreme E to steal some of Formula E’s thunder. After all there are only so many partners willing to strike out and commit to EV motorsport adventures right now.
One man well placed to give an appraisal is DS Techeetah’s chief commercial officer Keith Smout. His Formula E champion team recently announced its own Extreme E entry.
With a foot in each camp, Smout believes that Extreme E’s capacity to leave legacies in ravaged areas of the world is an attractive narrative for commercial partners and potentially future manufacturers joining.
“I’m very impressed by what Extreme E has done so far,” Smout told The Race.
“Firstly, the focus on taking the message to the next level by going to the places where there are problems is compelling.
“Secondly, when they arrive in those places the opportunity for partners associated with the series to actually go and see these environments is unique.
“But to me, the fundamental difference is they are already going to create legacy projects. The legacy project is really where you put your money where your mouth is.”
Formula E will roll out its new brand, commercial and PR machines in the coming weeks and months up to Santiago. This is expected to begin next week with weighty sustainability achievements.
Smout added that he believes Formula E “has done an amazing job. It’s grown, but we have to keep moving our message forward.
“Adapting to the changes around us and being ahead of the game is vital. But also at the same time, the reality is that Extreme E are already addressing those concerns and in some ways they’re catching up to Formula E very quickly at the moment.”
As Smout attests Formula E has built itself a fine platform but now it needs to adapt quickly, protect its USP and ensure that it can not only survive this, the toughest of economic times, but also keep a close eye on those noisy neighbours.
