Inside Honda’s Game-Changing Decision for F1 2026

Making a strategic pivot towards sustainability, Honda is set to partner exclusively with Aston Martin for the 2026 Formula 1 season. This move follows their decision to reduce the financial strain of F1 engine projects and aligns with the new F1 regulations towards carbon neutrality.

The company from Japan will transition from its alliance with the two Red Bull teams to an exclusive partnership with Aston Martin for 2026. This new project was confirmed two and a half years after Honda announced its planned departure from F1 at the conclusion of 2021.

This decision resulted in a transitional phase from 2022-25, during which Honda will persist as a paid supplier to Red Bull without any significant involvement beyond the particulars of the contract. Initially, Honda had no plans to participate in F1 in 2026 or later.

In October 2020, Honda had reasoned that it required to shift resources towards carbon-neutral initiatives within its automotive division – a strategy it now asserts can be complemented by an F1 engine project, due to the inclusion of sustainable fuels and greater electrification in the 2026 engine rules. This strategy is further bolstered by the introduction of an unprecedented budget cap for power unit producers.

“The predominant factor influencing our decision this time was the direction that the new 2026 regulations are taking, specifically the move towards carbon neutrality,” stated Koji Watanabe, President of Honda Racing Corporation (as seen above).

“This path aligns with the trajectory our companies are adopting for the future. That was the defining, pivotal factor.

“At present, electrical power accounts for 20% or less compared to the internal combustion engine, but the new rules would necessitate about 50% or more electrification, thus further advancing towards electrification.

“I anticipate that the technology for electrification will be beneficial to us in mass-producing vehicles or manufacturing tools in the future.

“Furthermore, the 2026 regulations that are to be implemented would compel us to fully adopt carbon-neutral fuel. This would necessitate a rethinking of how to integrate this new fuel with the internal engine. We would also need to strategize on optimizing efficiency to enhance speed. This aligns with Honda’s direction.”

Therefore, Honda’s official explanation suggests that its decision results from F1’s official approval of its 2026 engine plan last year.

However, this rationale seems to overlook the fact that F1’s net-zero carbon scheme, outlining a vision to reach 100% sustainable fuels, was announced in November 2019, while plans for 50% electric power units were openly discussed in F1 by early 2020.

Historically, Honda has typically taken a short-term perspective on its F1 involvement. Consequently, the decision may have been influenced by the 2026 regulations not being entirely established at that point or the fact that they were several years off – which is why Honda always kept the possibility open for another project, even though it did not formally intend to return immediately.

Mibe has also argued that Honda has realized tangible benefits from reallocating its F1 resources to other automotive projects over the past year or so, and he contends that the company is now a frontrunner in electrification.

Such a brief timescale to achieve that status would seem unlikely, given the severity of the situation as depicted in October 2020. Nevertheless, the inference is that Honda believes it’s now feasible to divert resources back to F1, particularly if there are potential downstream advantages to the company’s electric vehicle technology.

“Undeniably, investment is required, and with a cost cap, we are setting a maximum limit on the amount we can invest,” Mibe stated.

“We’re not going to be making unlimited investments as we did in the past.

“Investment expenses are not solely focused on racing. We are currently developing electric vehicle tools as well, and we can leverage that investment.”

“F1 batteries need to be high-performance, so these technologies can also be leveraged for the development of electric vehicle tools.

“It’s very challenging to differentiate how much investment will be allocated to what purpose, but we have an overall value in mind.”

The real motivation for the 2026 project seems to be a combination of regret over the initial decision – especially as Honda began winning more frequently immediately afterwards, has now claimed three titles, and is set to win two more this year – and now having a far more financially feasible option.

Initially, Honda struck a deal with McLaren that meant Honda shouldered the full cost of development and paid $100 million a year to the team. Then, Honda spent hundreds of millions of dollars annually to win with Red Bull. These staggering figures were evidently unsustainable.

Mibe emphasized that Honda will not be spending anything near what it did in the past on F1, for two reasons. Firstly, the cost cap, which is already being implemented for capital expenditure. Secondly, it is implied that the project will be backed by partners – Mibe said that Aston Martin approached with a “passionate offer and their determination to win whatever it costs”, that Honda is “not increasing investment” into the company by returning to F1, and there will be “no negative impact on other businesses”.

“The key will be to develop with efficiency,” Mibe stated. “It’s not a scenario where we engage in trial and error and conduct numerous trials.

“That was the previous approach, and this time we want to be far more efficient, strive to minimize the cost as much as possible, and develop a power unit that can win.

“In terms of development, I believe we can bear the cost of the racing activity. I can’t specify anything, but it’ll be significantly less than what we have spent in the past.”

Given the enormous investment already made in the Aston Martin project and the resources of team partners like Aramco, which will collaborate on the new 2026 fuel with Honda, it’s easy to envisage financial support being a crucial part of this arrangement.

This suggests that the Aston Martin deal might resemble Honda’s current setup with Red Bull, where Honda is paid to be the engine supplier. However, even if Aston Martin is compensating Honda, a significant distinction from Red Bull’s maintenance-and-supply agreement until 2025 is that Honda will be fully invested in development.

Therefore, Aston Martin will anticipate Honda’s complete R&D commitment, while Honda can participate in F1 fully without incurring the same expenses it bore previously.

One clear benefit for both parties is that it could make Honda’s involvement in F1 much more defensible in the long term, which is something it has always found difficult to justify.

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• What Drove Honda to Leave F1 and then Reconsider Their Decision?
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