Championing Sustainability in Motorsport with Alejandro Agag- Part 1

Some Questions I Ask:

• How long did it take for Formula E to be a good business? (04:53)
• What are the different series you’ve created and how are they different? (11:06)
• Why are Formula E races held in cities and not on race tracks? (15:13)
• What’s the biggest challenge you face while constructing a race track in a city? (14:14)
• Have you ever engaged Tesla about joining Formula E? (22:17)

What You’ll Learn in this Episode:

• The motivation behind starting Formula E (03:25)
• How motorsport can help sustainability (05:53)
• How the idea of Formula E started off (09:39)
• What it took to get major car manufacturers on board (19:07)
• The importance of gender diversity in Formula E (20:06)

Connect with Alejandro: 

• Formula E
• Extreme E
• E1 Series
• Instagram

Connect with Ed Bernardon:

• LinkedIn
• Future Car: Driving a Lifestyle Revolution
• Motorsports is speeding the way to safer urban mobility
• Siemens Digital Industries Software

Ed Bernardon: So, Alejandro, you’ve had a career in politics, and then a financier, and then, of course, you leveraged all that into racing. Interesting career. So, based on your experience, do you think that politicians or financiers would make better racecar drivers?

Alejandro Agag: I think politicians would make, for sure, better racecar drivers than financiers.

Ed Bernardon: Why is that?

Alejandro Agag: I think politicians have more ability to manage large groups, like a racing team, to bring people together to achieve a goal. I think they do things more long-term. I think they’re less worried about the pressure of the short term. So, I think politicians will make better race drivers.

Ed Bernardon: So, if you’re headed into a turn and you’re going to outbreak, you think they’d be better doing that outbreaking maneuver than the financier?

Alejandro Agag: Definitely. The politicians worry less about the consequences.

Ed Bernardon: All right.

Arguably one of the biggest issues of our time is climate change and we have all started to feel the effects caused by a warming planet. The concept of sustainability — finding long-term, renewable alternatives to environmentally-adverse practices — is becoming a lead talking point in most spaces, including the world of motorsports. So, the face of racing is changing for racing has to maintain its technological leadership, and more important, it has to stay relevant, especially when it comes to sustainability. Today, on our podcast, we have the pioneer of electric car racing: on-road, off-road, and soon even on the water. Alejandro Agag, the CEO of Formula E Holdings. He started off in politics, he was a financier, and he’s now taken all that background and moved into racing where he’s utilizing racing to help build a more sustainable future for all of us. He founded the Formula E racing series in 2012 and fast-forward to today, Formula E is widely successful and has led to the inspiration of Extreme E, Extreme H, and the E1 boat racing series.

Welcome to The Future Car podcast, I’m your host Ed Bernardon, VP of Automotive Strategy at Siemens Digital Industries Software, and today, Alejandro and I talk about climate change, sustainability, and the role motorsports based on electric and hydrogen-powered vehicles and the role they will play in all this. In Part 1, Alejandro breaks down the different racing series, what he hopes each will achieve when it comes to sustainability, and we discuss his motivations behind starting the first series, Formula E, in 2012 and how it’s grown and developed since then.

We also talk about the technology involved in developing these electric vehicles, the fan involvement, Mario Karts, what the future looks like for electric vehicles, and how all this started as notes on a napkin from a dinner in a Paris restaurant. Alejandro, welcome to The Future Car podcast.

Alejandro Agag: Thank you very much, pleasure to be with you.

Ed Bernardon: I wanted to talk to you about Formula E and how it really got started back in 2012. An interesting statistic from that year is that 120,000 electric cars were sold globally. In 2021, 120,000 electric cars were sold globally in just a week. So, we’ve gone from 120,000 vehicles in a year to 120,000 in a week. What was your motivation back in 2012 to get into electric car racing, when people barely even noticed EVs were around?

Alejandro Agag: I think at that time, 10 years ago, my motivation was a double motivation. I had two main drivers. One was, obviously, sustainability. One was to try to make racing more sustainable, to basically do something good with my own activity because I was a racer, I loved racing, but I felt – and here’s where the second motivation comes – that we were losing the relevance; we were losing really the connection with where things were going, and things were going to most of them in the future. The second motivation is financial, business. I saw that this could be a great business opportunity. I saw that combining racing with sustainability could be a great place to sell sponsorship, could be a great place to offer a new race to venues around the world; all-in-all could be a great business opportunity. So, one, motivation, sustainability; the other one, business.

Ed Bernardon: When you start a business, sometimes at first, it’s not profitable. But you had to have the vision that it’s going to be maybe a year out or several years out. How long did it take for Formula E to truly be a good business? Was it a good business right away or did it take two, three years?

Alejandro Agag: Took about five years. In the beginning, it was a heavily loads-making business. But we always were convinced that if in the medium term we would manage to survive, this was going to be a great business. It took longer than we thought. Costs were higher than we thought, revenues took longer than we thought. So, of course, it was a gap, and we had to raise capital again and again. But luckily, we were able to find investors that were always willing to support this kind of vision, this kind of project, I think, mainly because of the sustainability angle of the project and the technology angle of the project also about electric cars. So, we were able to raise capital and go through those tough moments. And today, it’s a very profitable business.

Ed Bernardon: So, the sustainability angle, obviously, key to Formula E. So, motorsports, in some ways, not electric racing, but has become from a sustainability standpoint, “Oh, internal combustion engine is making the air dirty,” but you sort of turned it around, and now you’re taking this idea of sustainability, but you’re getting it out there through the power of motorsports and making it exciting. What is the role of motorsports here in taking something like sustainability and making it exciting? How does that actually work?

Alejandro Agag: I think the role of motorsport can be really important. And you said it right, sustainability sometimes is perceived as not fun and as not that attractive; it’s a boring topic, which on the contrary is an incredibly important topic. We need to make it fun. Motorsport has the power to bring sustainability to a much wider audience, people who necessarily don’t want to watch a documentary but they want to watch a race. If you take these races like we do in Formula E to cities and we showcase electric cars, or you take it with Extreme E to the most remote corners of the planet, where climate change is actually having a huge impact, that is using motorsport as a tool for the climate action cause.

Ed Bernardon: So, you go to all these cities all over the world, and you mentioned you’re getting a new type of fame. Can you give me an example of how the fanbase might be a little bit different based on the people you’ve met in the different cities where you’ve raised, from the sustainability standpoint?

Alejandro Agag: Well, if you wanted to hear the extreme example, we took a race to Greenland. Nothing had ever happened in Greenland in terms of sports, let alone a race with cars and infrastructure, and we took our ship there, and so on. There were 144 people living in the town near where we had the race – so, all 144 came to the race. So, there you go, 144 new Inuit fans for electric motorsport, that will be the extreme because, of course, we’re going to places that are really remote. But it’s a different fan base. Well, it’s different and similar, because the younger generation that likes motorsport, enjoys electric motorsport, and they like to see motorsport that has a cause behind a purpose. But also, you have a lot of older, like me, fans of motorsports, that we still like to see these races. I mean, let’s not forget, some of the best drivers in the world of motorsport, in general, are racing in these races.

Ed Bernardon: And it’s also good to feel that motorsport is relevant, that’s got to be a piece of it.

Alejandro Agag: Yeah, there’s a key; the relevance and the connection to real life. 10 years ago, when we started this, 120,000 electric cars were sold in the world in the year. Now, 120,000 cars were sold in the world last week. So, the acceleration of the sale of electric cars has been huge. And of course, part of that, maybe a very small part, is thanks to a world championship of electric cars existing and people having seen it. I mean, hundreds and hundreds of millions have been exposed to Formula E races; most of the improvement in technology of these cars, some of it comes from Formula E. So, we have a role in that. So, definitely, it has an impact. The connection between real life and motorsport is what makes it relevant.

Ed Bernardon: Did you drive an electric car to work today?

Alejandro Agag: Well, I don’t drive myself but I did come in a car that was hybrid.

Ed Bernardon: So, you got that little piece of electric.

Alejandro Agag: Absolutely. My wife went fully electric to her office this morning, and we drive electric at home.

Ed Bernardon: In your garage, at home, is it full of electric cars? Do you have any internal combustion engine cars in there?

Alejandro Agag: My garage is really interesting because I have an i3 so I have a fully electric car. Then I have the first winner of the Formula E race in Beijing is in my garage, that’s a race car that is fully electric. I don’t really drive it to the office, but it’s a Formula car. And then I have a car from 1964, that is combustion but we’re going to transform it to electric.

Ed Bernardon: It’s been said that this whole idea started off on a napkin that you were sketching when you were sitting down with Jean Todt. So, you’re sitting there having dinner, “Hey, let’s do all-electric car races. What do you think, Jean Todt?” Is that how it went?

Alejandro Agag: That’s almost how it went. So, Jean had been elected president of the FIA of the Federation of Motorsport. From my time in politics, one of my colleagues was Antonio Tajani, who’s an Italian politician, who at the time was Vice President of the European Commission, in charge of the industry portfolio, which had the motor industry within the industry portfolio. So, Jean was keen to meet with him to understand where the commission was going in the general direction of the motor industry. I organized the dinner for the three of us in a small restaurant in Paris called Le Stresa. And yeah, I had this napkin, and then we were talking, and Antonio kept going on and on about how the commission was going to push electrification, the targets for CO2 emissions for cars, and so on and so forth. And Jean said, “We should do an electric car championship.” And I said, “I’ll organize that.” And I was writing on his napkin, and the napkin today is on a frame above that table in that restaurant in Paris.

Ed Bernardon: Oh, wow! I was gonna ask you if you kept it. So, you still go back there and have a meal every now and then?

Alejandro Agag: Yeah, I go there regularly. It’s run by five Italian brothers. It’s a great place. Best pasta in Paris.

Ed Bernardon: What was the name of the restaurant again? So everybody could go there and see the napkin.

Alejandro Agag: It’s called Le Stresa. Like “stress” but with an “A” at the end.

Ed Bernardon: Okay, Le Stresa in Paris, the world’s most famous napkin probably in a frame. So, Formula E, Extreme E, Extreme H is coming, E1 on the water. Tell us about the different series, how they complement each other, how they’re the same, how they’re different, the goals of each. Tell us a little bit about all these series that you created or are creating here.

Alejandro Agag: Each series has a different role and a different kind of soul but they’re all, of course, interconnected. ABB Formula E Championship, we call it ABB Formula Champion. Now we have a great partnership with ABB. It’s really the expression of Formula cars racing in cities, the expression of electric race cars inside the cities. And the message is, electric cars are ready for mobility in the cities today now, and we can showcase and bring that closer to the fans in the heart of the cities. So, that’s Formula E. Extreme E was let’s take these cars, let’s take electric cars like another version, rally to showcase that these cars can work in every environment. And at the same time, to take them to places that have been damaged by climate change or have suffered the impact of climate change, and to showcase that, and to talk about that, and to embed that message into our broadcasting. And that’s Extreme E. Extreme H comes almost like a sequel of Extreme E to create a platform for hydrogen. Hydrogen is a new technology; until now electric cars have been working with batteries mainly. But there is also this other technology, hydrogen, and hydrogen fuel cells in this case, where we can use the hydrogen fuel cell to charge a battery that then powers the electric motors. So, effectively, we’re talking about an electric car that basically stores the energy in a different way; you can store the energy on a battery or you can store the energy on hydrogen. Hydrogen is really a storage mechanism, not really an energy source. That’s Extreme H. And we want to give this platform to this technology that is becoming more and more important. And especially, green hydrogen can play a very important role in decarbonizing mobility, particularly ships, maybe larger vehicles, but we want to give a platform to that technology. And then E1 is basically taking all these electrification and mobility revolutions to the water, and the water is going to be the next frontier for decarbonization. I think many, many water areas, lakes, rivers are going to become electric-only, to become cleaner. There is a lot of pollution that comes from the diesel engines on these boats. So, we are going to make a championship to promote electric boats – battery-electric boats, for now. Probably, hydrogen will play a big role in the future, also develop the technology for these boats that then can make them ready for mass adoption.

Ed Bernardon: I think I see an interesting pattern here. So, Formula E, let’s take this electric drive technology, better technology to apply to racing. Let’s show that it can be done, technologically. You did that. Now, you say, “Hey, let’s take what we’ve learned technologically, and let’s use it to bring attention to all these different places challenged by climate change.” Then it’s not just battery electric vehicles, also hydrogen. So, technology comes in again. Now you take all of that, and you apply it to water to draw attention to what’s happening. So, it’s sort of a back and forth, it seems like, the technology and bringing attention to sustainability really playing off each other now within a series, but between all the series as it grows.

Alejandro Agag: It is. And the beautiful thing is that you have the technology. Well, the technology doesn’t change so much from a car to a boat. So, we can take a lot of the lessons we learned developing the technology for race cars, and apply them to boats. And actually, the engineers that created the power trains of generation to Formula E are working on the E1 boats, and the SeaBird company creates the E1 electric boat. So, there’s definitely technology transfer from land to water, in this case, and maybe, probably there will be technology transfer in the opposite direction from the water to land, depending on what we can develop in the water.

Ed Bernardon: Do the engineers from these different series, do they communicate with each other? Actually, some actually participate in multiple series, correct?

Alejandro Agag: Some of them are the same. So, basically, because the races don’t clash, some go from series to series. And the lessons you learn on one series, you can apply on the other one. So, it’s kind of a big technology campus traveling around the world, basically. It’s like a traveling circus with different platforms that basically are connected.

Ed Bernardon: Formula E is the foundation for what you’re doing. And I think a key thing of that has been to advance technology so, ultimately, it can benefit everyone from track to road. Tell us a little bit of a Formula E; for instance, you don’t race on racetracks, you actually race in cities. What was the reason behind that?

Alejandro Agag: Yeah, the philosophy was to take the race closer to the public, and also to use the cities as really the showcase platform for these electric cars, to showcase that there is a solution for mobility in the cities now. So, that was the message for the cities. It’s been really complicated because, of course, it’s much easier to go to a racetrack and just put the cars there and race. When we go to cities, you have to build a track, to shut down streets, put walls, fences, grandstands, you name it. But at the same time, it makes it very different and unique. And I think the uniqueness has been key to attract partners, manufacturers, and sponsors who wanted to race in the heart of the biggest cities in the world.

Ed Bernardon: I don’t think people fully realize this sometimes, but like you say, if it’s a fixed race track, the stands are there, the track is there, you go in, you go into the garage, the paddock. Here, you have to actually build the racetrack, put it together in a few days, and then tear it down so that people can drive to work on Monday or Tuesday. What’s the biggest problem you see, or the biggest challenge you always have in constructing a racetrack in a couple of days and then tearing it down again?

Alejandro Agag: It’s a huge challenge. We have a big, big team here just specialized on that. If you think about it, it’s almost like a big ballet where everything needs to come together at exactly the right time. So, you put in the walls, but then you have a cable for the TV broadcasting, but then you have another cable for the timing system, then you have the starting lights, then you have all the flags for the marshals, then you have the security boundaries. And everything needs to be assembled right on time. If the wall is not there, you cannot put the cable, and then you put the cameras in place, and then you put the barriers. So, everyone needs to be perfectly coordinated, and we’re talking thousands of people perfectly coordinated to build this thing in a few days and then dismantle it.

Ed Bernardon: Is it hard to convince the mayor of a city?

Alejandro Agag: Not really. The mayors normally are very supportive of it. Of course, sometimes it’s harder than others, like there are cities where we race in places that are more convenient. In others, like in Zurich, for example, we blocked the whole city for too long, and then we didn’t get the invitation to go back the next year. So, we’ve had some of those situations. But in general, we get very well into the community; we specific actions, also, with the cities, leaving some legacy behind. So, normally the mayors are happy.

Ed Bernardon: It sounds like you gotta get your Zurich track set up ballet to be a little bit more synchronized.

Alejandro Agag: Well, I think, in Zurich, we need to do a boat race because you do it on the lake, you are in the center of the city but you don’t need to shut down any streets.

Ed Bernardon: I would imagine, too, that these mayors like to show they’re doing something that’s relevant to sustainability.

Alejandro Agag: All the mayors in the world that are really pushing the sustainability agenda. I know in the big cities, usually, we find mayors who are very receptive independently of the political orientation, left or right or center; they are all pushing for the sustainability agenda in different degrees, but they’re all pushing in the same direction.

Ed Bernardon: And again, I think that same mayor would love to do something that’s fun for all the people that are in their city. So, once again, you get that combination of racing, the power of it from a marketing standpoint, from an entertainment standpoint, together with sustainability.

Alejandro Agag: Exactly. That’s it. So, for the mayor to bring entertainment to the city, to bring sports events that also at the same time fill the hotels, create economic activity, the restaurants, and so on. It’s a winner. So, mayors, they get the best of both, that’s why we think it’s a really attractive proposal for mayors.

Ed Bernardon: The other side from track to make it relevant is to get the car manufacturer. So, you’ve got Audi, BMW, Mercedes, Porsche, Jaguar; how did you get them interested in this? Did it just come easily? Did you have to convince them? Because that’s quite a good lineup of OEMs. It wasn’t that complete right away, but it grew over time.

Alejandro Agag: So, I think the manufacturers were waiting to see if the championship would exist and consolidate. They didn’t want to get associated with a championship that was gonna go bust after a few months. So, when they saw, after two, three years, that champion was strong, we had really strong backers, really strong sponsors, then is when they started to come on board. And then it’s been great, and I think manufacturers have the championship as a platform to develop technology, which is very important for them, that then they can implement in their own road cars that they’re going to sell to the public. So, it’s a great platform for the manufacturer. We’re happy to have them and they really push to win. The problem sometimes having so many manufacturers that only one can win. So, all the others have to go back Monday and say, “We didn’t win.”

Ed Bernardon: Now, we’ve had, on the podcast in the past, Susie Wolff, who runs the Venturi Rocket team. And we also had Catie Munnings that raced in Extreme E. So, diversity is also a key part of what you’re doing. It’s not just about sustainability.

Alejandro Agag: Yeah, of course. Getting more women into motorsport has been a priority for me for a long time since Formula 3. I had a female Formula 3 team, maybe 18 years ago. And I think this format of mixed doubles is great because you have to escape from the debate of “Who is faster: women or men?” and create a format in which they work as a team. They’re both equally decisive for victory. And I think that is the beauty of the Extreme E race format, that they work as a team. We’ve given a great place for really talented drivers to shine their talent, to show. Catie is an example, all the other female drivers are great. So, we’re very happy with that. It is one of the things we’re most proud of.

Ed Bernardon: Especially, in my interview with Susie Wolff, racing is not just about driving; you have to manage a team. Like you said, the ballet is not just in setting up the track, but it’s the ballet of getting a car and tuning it, and taking the data and the whole business of running a racing team. Catie, like you said, you’re mixed doubles in Extreme E – so, you have women and men both racing equally, each team has one of each. But Susie is actually managing a team. She’s raced Formula 1 cars and now she’s managing a team. So, it shows what women can do, from driving all the way through to managing a very complex operation.

Alejandro Agag: Absolutely. Susie says it very well: racing is not only driving the car. It’s everything around, it’s everything behind, it’s the effort of the team. And to have women leading that, like Susie, and having that role, I think shows also that women have a very important role to play in this sport equally as men. For managing a team, it’s like managing a company; you don’t need physical strength. To drive a car, you do need physical strength, and that sometimes plays as a disadvantage for female drivers. But to run the company, no, you just need your brain. And obviously, we know that the brain of the woman is equally, if not more, powerful than the one of a man.

Ed Bernardon: When everyone thinks about electric cars, Tesla always comes to mind. Have you ever spoken to Elon, “Elon, why don’t you join us here? Why don’t you come in and show that Tesla is the best?” Have you ever engaged with him to see if he’d be willing to do this?

Alejandro Agag: I did. I had a meeting with him very early on, I think it was in 2013, even maybe 2012, and was really starting to launch the project. And I had exactly the conversation you just mentioned. I said, “Why don’t you join Formula E with Tesla? I’m doing an electric car championship.” And at the time the answer was a very polite decline because what he said is that, “Listen, I want my engineers to focus fully on delivering the road cars. I don’t want them to be distracted with anything else.” Which is a perfectly understandable explanation. Although, I have seen that he likes, for sure, fast cars. I saw some interview of Elon talking of owning a McLaren many years ago. So, he’s definitely into the car. He has the “car virus,” if you want to call it like that. But I don’t think he’s too keen on racing or taking his brand racing, putting it to compete with other brands. And Tesla is so far in its own place, that I, even as a marketeer, I can understand that he wants to keep the brand without mixing them with the other brands. On the other hand, I would love to have them, of course, because it’s probably the brand of electric cars. And I think it will always be. So, it’s the kind of mixed feelings where sadly we don’t have him but we’d love to have him in any capacity involved with us even if he was just as a fan.

Ed Bernardon: Is it time to give him another call, you think? Maybe try and get him involved? Or hopefully, he’s listening to The Future Car Podcast, maybe this could be the invitation right here.

Alejandro Agag: I know that. I mean, we have some common friends that have mentioned it overtime with him, but I think the answer has always been the same. So, I don’t know how much success my goal would have. I would just love to go and say hello and see how he’s doing. I mean, I follow him and I think he’s doing it very good.

Ed Bernardon: Yeah, start with that, who knows where the conversation will go. There are a couple of interesting things that are in Formula E that’s different. You have this thing called the Attack Zone and Fan Boost. Tell us about those two, and especially Fan Boost, because that’s something that brings in social media and the younger generation. And it’s more than just what’s happening right on the track.

Alejandro Agag: Yes, because Formula E or the ABB Formula Championship is new, we could take some risks or do some things differently. We wanted to involve the fans, so that’s Fan Boost. Fans can vote online on social media, vote for their favorite driver, and that favorite driver gets a boost of energy, a short boost of energy during the race. So, you basically have fans being able to interact and to have an effect on the result of the race. It’s a small push but it’s certainly you can feel it, you can do an overtaking with that. Then Attack Zone is a bit like the Mario Bros concept, when you go across the star and you get more energy. Here you go outside the optimal racing line, over a special sensor with some drawings around it and some arrows and things. And then you get four minutes more energy, but it’s substantially more energy. So, all the things play their strategy of the Attack Mode and it makes the races very interesting.

Ed Bernardon: Do you think, with some of your younger drivers that probably played Mario Kart, that that might be a little bit of an advantage for them?

Alejandro Agag: I can tell you that there are massive differences between younger drivers and older drivers in video game skills.

Ed Bernardon: In what way? What’s the big difference?

Alejandro Agag: The older ones suck, basically. They don’t know how to play video games against an 18-year-old. I think it’s just kind of experience. These kids have been born with video games. I had some video games when I was young, but it was not at all the same thing. Nowadays, they’re so good at video games. And you can see with younger drivers, they’re just better.

Ed Bernardon: I guess probably one reason for that is you get to practice the skills that you need to drive a race car. You can start doing it when you’re five, six years old, it’s cheap, it’s right there on your screen and you don’t have to go through all the expense of buying a go-kart.

Alejandro Agag: There have been a few attempts to crossover from video games to real racing.

Ed Bernardon: Does it work?

Alejandro Agag: Doesn’t work.

Ed Bernardon: Why not?

Alejandro Agag: Because driving is a very physical activity. You have to coordinate your brain with your muscles in a completely different way. So, it’s like a different ballgame. Even if the chair moves and has some special effects, you will never have the g-force that you get on braking aggressively on a corner at 300 kilometers an hour, that you cannot get on the video game. And that will affect the whole skill set and how you react and how your eye coordination with the muscle go and everything. So, it doesn’t really give you an advantage. I mean, it’s some they do a lot of sim, these drivers, to learn the track from the corners and the distance but you need to be a real driver.

Ed Bernardon: Yes. And I think you sort of hit it there right. It might help you learn the track, like where to turn in, where the apex is. But to feel the edge of adhesion, that comes through the rear end and the body and the contact with the car. No one’s perfected that yet for a video game.

Alejandro Agag: Not yet. Maybe in the metaverse, we will be able to do it with special I don’t what, envelope the whole body and make g-forces and so on.

Ed Bernardon: Yeah, That could be your next project.

That’s part 1 with Alejandro. Join us on our next episode when we’ll learn more about the details of the machines behind these sustainable racing series and even what to expect for the future of electric drive and racing.

And as always, for more information about Siemens Digital Industries Software, make sure to visit us at plm.automation.siemens.com. And until next time, I’m Ed Bernardon, and this has been The Future Car Podcast.