The last day of September coincided with Renault’s decision to officially close the Formula 1 Power Unit program ahead of 2026, when the new unit was supposed to debut to meet the technical regulation changes introduced by the FIA and Liberty Media to attract new engine manufacturers.
This decision has certainly drawn attention, especially because, after it was revealed last July, there was a long process involving the leadership of the French team, Renault executives, and the unions at the Viry headquarters before an official announcement was made. The latter were clearly against cutting the project, not only because it was an important aspect for French technicians but also due to fears that transitioning to other activities could lead to job losses. Some technicians have already been redirected to Ferrari, though there is a common benefit in this.
However, while abandoning their own engine in favor of an agreement with Mercedes to become a customer of the German manufacturer is undoubtedly a seismic event, it is interesting that the news has been kept somewhat under wraps. For now, Alpine has only confirmed the halt of the 2026 program without providing further details, simply emphasizing that the F1 division at Viry will be transformed into a high-tech engineering center.
Renault CEO Luca de Meo provided a broader view of the situation in an exclusive interview with the French newspaper L’Equipe, offering some explanations behind the decision.
The money
It’s hard to deny that, in a sport like Formula 1, money plays a central role in the decisions of major manufacturers. While Renault has a great tradition in engine manufacturing, having been present in the top open-wheel category since the 1970s, it’s undeniable that continuing the Power Unit project comes with costs. The FIA has imposed clear budget constraints to ensure that engine spending is also more contained, but a manufacturer still needs to be ready to invest substantial sums to keep the project going.
While Renault’s engine personnel repeatedly stated that the 2026 PU project was in line with the performance targets set by the engineers, de Meo stressed that, although the decision was “heartbreaking,” one of the reasons for it came down to financial data.
“I’m a manager. I run a publicly traded company. And I have to rethink the F1 project to finally win. So, I’m looking for shortcuts to reach that goal. We’ve become invisible. Another two years like this and the project would deflate completely. We needed to give it a shock—with a financial logic,” Luca de Meo said in the interview with L’Equipe.
For Luca de Meo, the investment required to produce an engine doesn’t make sense when it’s possible to achieve similar results with lower costs. Indeed, with the introduction of the budget cap for engine manufacturers, we’re talking about around $100 million per year. However, this must be supplemented by the necessary investments to make the Power Unit competitive in terms of infrastructure. In fact, with the new regulations, teams will also have the opportunity to use new test benches, which requires further investment. Renault has often relied on external suppliers to acquire technologies.
Clearly, F1 enthusiasts focus more on the sporting side of the situation, as it’s not pleasant to see a brand like Renault abandon the top category in terms of engine manufacturing. However, de Meo emphasized the financial aspect: “True fans aren’t concerned with this calculation. I am,” he said.
De Meo explained that the new regulations coming in 2026, with increased emphasis on efficiency and the importance of the electrical component, have highlighted the costs, especially for a brand that has shown some shortcomings in this area in recent years. Undoubtedly, the 2026 Power Units will have a different foundation from the current ones, but it will still be a challenge.
Luca De Meo explained that Viry, with 340 employees in F1, has no chance of competing with Mercedes, which, according to him, employs 900. He added: “They have the test benches and the batteries. They have test benches we don’t have. The shift to the hybrid era required significant investments that were underestimated at the time. Structurally, we’re working with three cylinders when others have eight.” – he pointed out.
“When I arrived four years ago, the group wanted to stop the F1 project. If it’s still here, it’s because I saved it. But we don’t have the structure to be at the forefront of battery chemistry development, software management, and energy recovery. It’s not just about putting an engine on the bench and saying, ‘Hey boss, I’m making 415 kW!’”
The marketing issue
F1 has long been a valuable marketing tool for engine manufacturers, relying on the fact that success would be followed by sales in showrooms. But de Meo suggests that the links between F1 and road cars have become blurred, as people now associate car brands with different things.
Aston Martin’s success on the track, for example, should boost sales of its road cars. The same goes for McLaren. Luca De Meo believes the value of building your own engine has now disappeared. “Sponsors come for a team, not for an engine. Partners sign with McLaren, not with the Mercedes under the hood. The F1 audience has changed. It has expanded to younger people and women. This new audience has a different interpretation of this sport.”
“We support a driver, a color, a brand. Not an engine. Alpine, given our position in the standings, is losing bonuses. Sponsors are rare. We have a gap. My shareholders know how to count. Alpine has to make money.”
Luca De Meo’s dream was also to build a team that could become a national French symbol, with a French heart at its center, but the project failed because it didn’t receive the right support: “I wanted to create a French team, the French Ferrari. I put two French drivers in the seats—they crashed into each other.”
“If you take a ride with me in an A524, there isn’t a single French sponsor. Not even one! I knocked on many doors. In vain…”
The ongoing sale rumors
Earlier this year, it was suggested that Renault’s decision to shut down its F1 engine project was a key step toward selling the team. The news has been repeatedly denied in recent months, but it’s clear this move has reignited those rumors, especially since it would be much easier to sell the team without the burden of the Power Unit program. For a group of investors, for example, it would make more sense to manage only the team rather than also running the Power Unit program, which primarily interests large manufacturers.
However, Luca de Meo once again explained why he doesn’t want to take that route, as, with the recent F1 boom, he believes teams will continue to rise in value. “I get phone calls every 15 days from financiers, eccentrics, who want to get into F1. They know that after 2026 it will cost much more,” Luca de Meo said, referring to the fact that, realistically, with the new Concorde Agreement, the price to enter F1 will be much higher, likely starting at a base exceeding $500 million compared to the current $200 million for founding a new team.
“If today they give you a billion pounds to take the team, two years later they’ll be able to sell it for double. There are plenty of speculators here. I’ve refused 50 times. A team will soon be worth between $3 and $5 billion. I’m not going to sell, I’m not stupid,” Luca de Meo added, referring to the fact that teams will continue to increase in value, making entry into F1 even more costly. Therefore, already being in the sport represents a significant value for a brand.
“Being in F1 is essential for the Alpine brand. We’re in a closed club. It gives credibility to the brand among car enthusiasts. We don’t need that money.”
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