Why Red Bull won’t build an F-1 power unit?

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Yes, Honda shocked Formula 1 by announcing their decision to quit the sport despite being the only power unit manufacturer in the hybrid-turbo era to win with two different teams (Red Bull Racing and Alpha Tauri). In fact, irony wasn’t lost when Honda re-committed to Indy Car a day after announcing their exit from Formula 1.

But the bigger shock in the whole Red Bull Racing – Honda – Formula 1 story line is Red Bull Racing’s serious consideration of building their own engines using Honda’s power unit IP.

Red Bull Racing has continuously impressed in Formula 1 by building race and championship winning cars despite being an energy drinks brand. In which case, one isn’t wrong in wondering why a Red Bull F1 power unit can’t be built with Honda’s IP. After all, both areas are outside the comfort zone of a company that otherwise manufactures energy drinks. In my view, there are two reasons why Red Bull Racing might not go down the road of building a F1 power unit. 

First, the sheer cost of undertaking this exercise. This can be further split into start up (or setup costs) and maintenance costs. The setup costs includes buying Honda’s IP, infrastructure to host the power unit team in Milton Keynes (or elsewhere) and hiring the right set of people (Andy Cowell?) to build and manage Red Bull Racing’s power units. The maintenance costs include regular testing and upgrading the power units as the season(s) go – this is standard for all power units in Formula 1.

Also the business model of manufacturing either chassis or power units or both differ drastically in Formula 1. As you may already know, Red Bull Racing has operated as a chassis manufacturer till date. Yes, Red Bull’s F1 power unit ambition is a problem money can solve but again, they have never run full-fledged teams on the chassis and power unit side of the business. Understandably, such a setup requires an investment appetite Red Bull can afford but haven’t pursued till date. 

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