Martin Fullard investigates the growth of the all-electric, inner-city Formula E series, and suggests festivalisation may be the cause.
I, like you, don’t want to be inconvenienced. Yet, I absolutely don’t want to see the planet decimated by human impact and I yearn for a clean, green solution to everything.
I was listening the James O’Brien on LBC this morning and he made an interesting point. With regards to the new Ultra Low Emissions Zone (ULEZ) now in force in London, he has great sympathy for the honest, hard-working plumbers who must now pay an extra £25 before they’ve even turned a tap, but says to really help the planet, first it has to hurt.
The tradespeople of London are the first to bruise until they can afford to replace their diesel vans with electric or hybrid ones.
Suffering early hardship is certainly something the all-electric Formula E racing series is experiencing. In May, London-based Formula E Operations revealed that its pre-tax loss increased by 26.7% to £22.6m in 2018, resulting in combined losses of £142.2m since it ran its first race meeting back in 2014. If you’re interested, Virgin Media (owned by Liberty Global) are the biggest shareholders, at 23%.
Suffering early hardship is certainly something the all-electric Formula E racing series is experiencing.
Accounts for the year ending 31 July 2018 show that revenue rose £33.5m to £114.5m, driven mainly by a new title sponsorship from Swiss engineering group ABB. However, this was hacked back with a spend increase of £38.4m on more staff and the development of a new battery which can last an entire race distance (at the moment, drivers have to use two cars, swapping halfway through).
However, true to O’Brien’s parable on the ULEZ charge, it seems the financial hardships are proving to be worth it long-term. In 2017, a total of 220,000 people turned up to watch Formula E races, but this more than doubled in 2018 when 476,000 spectators turned up across the season.
Why such a surge in popularity? I think it’s less to do with the series’ zero emissions, and more to do with the experience of the event itself. Formula E races take place on temporary circuits in city centres (including around Docklands and ExCeL London from 2020) rather than at proper race circuits, which are more or less always located miles out in the country, with the nearest attraction usually a BP garage.
It’s a day out, a festival, a chance for street-food vendors and entertainers to make a killing. It’s the perfect formula.
The temporary circuits provide endless opportunities for brand activations and experiences and, thanks to the urban location, it’s easy to access. It’s a day out, a festival, a chance for street-food vendors and entertainers to make a killing. It’s the perfect formula.
Nearly 80% of the series’ revenue comes from licensing and fees for hosting races, and if audiences continue to increase at the rate they are, there is no doubt Formula E will be in the black. Watch this sport closely.