(Reuters) – There’s a new kid on the block in motor racing this year, a quieter cousin to the brash Formula One, and it has the lofty aim of helping to get consumers to embrace electric cars.
Featuring teams backed by Hollywood actor Leonardo DiCaprio and British entrepreneur Richard Branson’s Virgin Group, Formula E will stage its first race in Beijing in September.
It has signed up heavyweight commercial partners including French carmaker Renault SA and tire company Michelin for races in cities across the globe, including Los Angeles, London and Miami.
Chief Executive Alejandro Agag says Formula E wants to help kickstart an underwhelming market for electric vehicles and win over customers put off by the cost of cars and the limited distances they can drive.
Agag says Formula E, which has the blessing of motor racing’s governing body, the Paris-based FIA, can help electric cars to shed their image problem and play a part in perfecting the driving technologies of the future.
“Marketing, we can provide right now. Technology, hopefully, we can help to provide,” the Spaniard told Reuters in an interview.
“This championship is the testing ground for that. We are ready to be very, very open and reactive to any new technology to include it very quickly,” added Agag, son-in-law of former Spanish Prime Minister Jose Maria Aznar.
London-based Agag, who owned a team in Formula One feeder series GP2, and fellow Spaniard Enrique Banuelos are investing around $100 million to launch Formula E, with billionaire property developer Banuelos providing most of the money.
A U.S. investment fund co-founded by Boston Celtics basketball owner Wyc Grousbeck has just injected around $20 million into the project, and Agag says others will follow.
“We will announce additional investors that have come in,” Agag said. “We have had a lot of approaches from investors. This was not something we really had planned for.”
Some of the additional funding will go into marketing the races, with Formula E planning to hire big name DJs to add to the festive atmosphere around their races.
In a further sign of the youthful audience they are targeting, fans will be asked to vote online for their favorite drivers, who will be rewarded with a power boost they can deploy during races.
ECCLESTONE NOT CONVINCED
Agag says Formula E will not be able to compete with Formula One and IndyCar racing in the United States in terms of initial performance but should offer compelling action.
Drivers will be able to reach speeds of up to 220 kph (135 mph), but the shortcomings of battery technology mean they will have to change to back-up cars after 25 minutes – halfway through a race.
“We need a real race. This is not a show, a parade or demonstration of electric cars,” he said.
Formula E has signed television contracts with Rupert Murdoch’s Fox in the United States and more than 80 other territories, with deals about to be signed for China and European markets including Britain.
Agag believes the business should at least break even in the first year as additional sponsors come on board and cities shoulder more of the costs of staging races.
He sees the races as complementary to Formula One, which he describes as the “mother of all championships”.
However, he is yet to convince Formula One supremo Bernie Ecclestone of the merits of his project.
“I don’t think he really is very keen on Formula E,” said Agag of the 83-year-old Ecclestone, who built up Formula One but stepped down from its board on Thursday following his indictment on bribery charges in Germany.
“He doesn’t really believe in the concept.”