Formula E losses reach £140m as green racing attracts fresh interest

Formula E, the electric-powered racing series, has revealed that its pretax loss widened by 26.7% to £22.6m last year, giving it combined losses of £142.2m since it held its first race in 2014.

Formula E Operations is based in London and its biggest shareholder is Virgin Media-owner Liberty Global which has a 23.9% stake. The series features cars that are powered by a 250kW motor giving them a top speed of 280kph (174mph). They are 25% slower than Formula One cars but, unlike their bigger siblings, they produce little noise and no emissions.

Manufacturers use it to show off their green credentials and it has attracted Audi, BMW, Jaguar and Nissan, with Porsche and Mercedes joining later this year.

Away from the track, Formula E’s results have been stuck in the slow lane. Accounts for the year ending 31 July 2018 show that revenue rose £33.5m to £114.5m driven by a new title sponsorship from Swiss engineering group ABB. But this was outstripped by a £38.4m increase in costs as Formula E added more staff and developed its new car which can last an entire race without needing to be charged.

A total of 78% of Formula E’s revenue comes from licensing and fees for hosting races which are held in city centres. There are 13 on the calendar including New York, Paris, Rome and Monaco, which takes place next weekend. Formula E recently announced plans to add a race around the Excel exhibition centre in London’s Docklands from next year.

The accounts state that it is on an upward trend as more than 476,000 spectators attended the races in 2018, up from 220,000 the previous year. They add: “A few new sponsors such as Bosch and Heineken also joined Formula E Championship since the end of the financial year, showing an ever-increasing popularity of the series.”

However, its loss fuelled a 12.8% increase in net liabilities to £132.5m and the accounts say “the company’s solvency is dependent on support from its parent company”.

The amount owed by the company to its Hong Kong-based parent, Formula E Holdings, increased by £14.4m to £138.5m last year. Its shareholders include Swiss bank Julius Baer and New-Wave, the ultimate parent of Weibo, China’s answer to Twitter.

The accounts add that in 2018 “the group successfully closed another round of funding, raising approximately €10.5m (£9m) of equity (€33m in 2017). The consideration was partly used to repurchase back some of the base shares from the CEO of the group for €5m”.

Formula E is run by Spanish businessman Alejandro Agag, who in May last year bid £515m to wrest control of the company from its owners. They gave it the red light and seven months later announced they were on the hunt for a new boss as Agag would be giving it up to become chairman of Formula E.