Formula E: Add India to the long list of failed races (4th Update)

Formula E could return to India in 2025 and discussions with other cities to host a race will begin soon, said co-founder Alberto Longo, making it clear that the electric series is keen to race in the country despite the Hyderabad E-Prix cancelation.

The Hyderabad race, which was scheduled to take place on February 10, was cancelled last week after just one season, with Formula E alleging a breach of the host city agreement by the newly-elected Telangana government.

Arvind Kumar, the former Special Chief Secretary of the Municipal Administration and Urban Development (MAUD) department, is being investigated for his alleged improper approvals in connection with the Formula E racing events which has resulted in the Telangana government facing a legal litigation.

Not enough fans buy tickets to see a Formula E race. The high cost of setting up a city circuit and flying the cars all around the world means ‘VooDoo Economics’ are at play because the cost far exceeds the revenue. Hence, why so many Formula E races disappear after a year or two.

Recently, Formula E Operations (FEO), which conducts Formula E racing events, informed the government about its decision to sue them after the Congress government refused to conduct the second Formula E race in Hyderabad.

The event was supposed to be held on February 10. FEO alleged a breach of contract by the MAUD.

The memo read: “Why the huge financial expenditure of Rs 46cr plus the tax amount of Rs 9 Crores was paid from the HMDA resources, even before the Agreement was signed and without obtaining the concurrence of the HMDAS Board of Directors as well as that of Finance Department of the State Government.”

The memo sought to know why the payment was made without getting consent from the State Government’s Finance Department and the Board of Directors of HMDA.

Additionally, it was alleged that HMDA did not have the necessary consent from Competent Authorities, as required by Secretariat Business Rules, for it to be designated as the Nodal Agency to host and manage the event.

According to the Congress government, no due diligence was carried out in order to safeguard the financial interests of HMDA/Government when taking on new responsibilities as the promoter for the Season-10 event.

“Why due permission was not taken, and the issue was not brought to the notice of the Competent Authority, when the tripartite agreement was terminated by the Formula E Operations, allowing the promoter, who was at gross default go free from any liability, while the additional burden of conducting the event besides hosting the same was passed on to the Government,” the Memo read.

Stick a fork in it, it’s done.  Formula E has announced an update to the Season 10 calendar with the cancellation of the Hyderabad E-Prix Round 4, scheduled for Saturday 10 February.

The cancellation comes following a decision by the Municipal Administration and Urban Development Department (MAUD), under the control of the Government of Telangana, not to fulfil the Host City Agreement signed on 30 October 2023.

Formula E Operations (FEO) has been left with no choice other than to formally give notice to MAUD that it is in breach of contract. FEO is considering its position and what steps it may take under the Host City Agreement and applicable laws. All of FEO’s rights in that regard are reserved.

The Hyderabad E-Prix would have been the only official FIA World Championship event in India in 2024 and was part of a multi-year agreement between Formula E and the Government of Telangana.

Other host cities confirmed on the ABB FIA Formula E World Championship calendar for Season 10 include Tokyo, Shanghai, Berlin, Monaco and London. The season begins next Saturday, 13 January, with the Hankook Mexico City E-Prix.

Alberto Longo, Co-Founder & Chief Championship Officer, Formula E, said: “We are extremely disappointed for the huge motorsport fanbase in India. We know that hosting an official motorsport world championship race is an important and prestigious occasion for Hyderabad and the whole country. The President of the Federation of Motor Sports Clubs of India (FMSCI), Akbar Ebrahim, and his team have been incredibly supportive in bringing Formula E back to Hyderabad. They share our disappointment in the decision of the Government of Telangana which means that will not happen.”

Jeff Dodds, CEO, Formula E, said: “It is deeply frustrating that we cannot build on the success of the inaugural race last year, which delivered almost 84m USD in positive economic impact to the region. We are also disappointed for our major Indian partners, particularly Mahindra and Tata Communications. Racing in Hyderabad was important to showcase the benefits of adopting electric vehicles in a market where pollution from vehicle engines has a massive impact on public health and the environment.”

Official Statement:

Formula E and the Municipal Administration and Urban Development Department (now under control of the new Government of Telangana) are in discussions regarding the Host City Agreement signed on 30 October 2023, and the staging of the Hyderabad E-Prix scheduled for Saturday, 10 February 2024.

Following a recent official communication received from the new Government of Telangana, Formula E is seeking urgent clarification of their contractual commitments under the agreement and how it could impact the Hyderabad race. Based on the content of the letter received, Formula E is concerned the race will not be able to go ahead as planned.

Formula E’s senior executive team met with the new leadership of the Government of Telangana immediately following elections earlier this month. Discussions have been ongoing since then.

With the event just a few weeks away and in its final stages of preparation, Formula E, partners and suppliers have already made significant commercial investments in the event. The inaugural Hyderabad E-Prix in February this year returned almost 84m USD in positive economic impact to the region, many times more than the overhead costs invested by Formula E and the Government of Telangana.

Hyderabad is set to host the only official FIA World Championship event in India next year, alongside other iconic world cities including Tokyo, Shanghai, Berlin and London, as part of a multi-year agreement between Formula E and the Government of Telangana.

Further updates will follow in due course.

Add India to the long list of failed Formula E races as voodoo economics continues to haunt the all-electric series.

–by Mark Cipolloni–

Crowds are small at most Formula E races because race fans cannot get excited about whiny electric cars buzzing around the track.

There is a visceral experience to the sound of an internal combustion engine as it pumps  loads of CO2 out the exhaust that plants and trees need to flourish.

India was absent from the provisional Formula E calendar issued in June, but the series had left a TBA slot which would have likely gone to Hyderabad, India if the race didn’t bleed so much red ink.

It costs a ton of money to fly the FE series all around the world and when the ticket revenue can’t cover the costs, only voodoo economics can keep an event alive.

If a local government is willing to lose millions of dollars to fund Formula E cars buzzing around their streets, then a race could survive, but most Formula E races have failed because the local governments can no longer afford to support a race that bleeds red ink.

Electric cars and electric car racing are only economically viable with government tax incentives, i.e. voodoo economics.

Criticism was heaped at the Hyderabad track for not being fully ready for the event, with work continuing inside the paddock well into the race weekend.