Alejandro Agag is the powerhouse behind Formula E, the world’s only single-seater all-electric street racing series.
When it launched in 2014, Formula E had its fair share of sceptics. But now in its fifth season, it looks like Formula E’s time has come at last.
This year will be the first time it is set to turn a profit; its recent momentum has seen its valuation increase to US$870 million. This is in stark contrast to the heavy losses it incurred in its first four seasons, when it almost went bankrupt.
Owing US$25 million to suppliers, chairman and co-founder Alejandro Agag was reportedly down to US$100,000 in the bank. He said in an interview with The Financial Times it was “a miracle” it survived. Liberty Media, the US billionaire-owned cable group which also owns Formula One, and Discovery, the broadcaster, injected capital at the right time to help save it.
Proving the cynics wrong (Formula One driver Sebastian Vettel described it as “cheese”), Agag managed to transform the series into the world’s top electric-powered motorsport, even challenging Formula One for sponsors and fans. It recently signed Swiss engineering group ABB as its first title sponsor, in a deal reportedly worth nine figures. ABB joins other sponsors ranging from Julius Bar to Tag Heuer, Heineken and Allianz.
Now with 13 races across five continents, last year more than 300 million viewers tuned into at least one Formula E race, up from 192 million in 2016. Big-name manufacturers are vying for a spot on the starting grid; Audi, Nissan, BMW and Jaguar are already present and they will be joined next year by two German motorsport giants: Porsche and Mercedes.
The second generation cars are considered more sophisticated aesthetically, accelerating from 0-100kh in 2.8 seconds with top speed at 280kph. Its first race of the 2019/2020 season is scheduled for 22 November 2019 in Saudi Arabia, with races held in Chile, Mexico, Hong Kong, China, Italy, France, South Korea, Germany, the US and culminating in London on 26th July 2020.
Agag says one of his primary motivations in setting up Formula E was to promote sustainability. As cities become more populated and urbanisation increases, Agag believes the threat of air pollution cannot be ignored. He says that inspiring people to switch to an electric car through the race series could have a tangible impact.
Following Formula E’s last race in Hong Kong, Billionaire caught up with Agag to better understand his vision for the series, electric cars and philanthropy.
What inspired you to create Formula E?
Well, there were two triggers of inspiration: one from a sustainability standpoint and another from a business perspective. I was already working in motorsport at the time — running a team in a lower category and pursuing other partnerships in Formula One — and I saw a gap in the market. I’d receive calls and emails from potential sponsors saying, ‘we can no longer have ties with a sport that isn’t sustainable and not looking to the future’. I kind of brushed off the first few, but the feedback kept on coming. You just couldn’t ignore it. This is where I thought we needed a change, a new championship, one that promotes clean mobility. Motorsport had started to lose relevance with the automotive industry. That’s where Formula E filled the gap.
How did sustainability become a passion?
We took a Formula E car to the Arctic ice caps in Greenland, whole chunks were breaking away and rivers of water were running beneath our feet. Sometimes you need to see it to believe it and these moments make me feel more needs to be done and time is against us. It’s a race, just as Formula E is.
I think it’s everyone’s own personal responsibility to make the preservation of our planet a priority: changing habits and routines to make a difference, whether that’s as simple as recycling, or switching to an electric car. My mission is to speed up that switch and make it come quicker. That means making electric cars more efficient, more affordable and the only choice when it comes to buying a new car.
What personal successes and failures led to the creation of Formula E?
There’s been a fair few of both along the way. We wouldn’t be here today without trying new things and pushing the boundaries of what’s possible. You have to be a risk-taker and it’s paid off with Formula E. People thought we’d fail and, thankfully, we’ve proved them wrong. I’ve worked in politics, sport and motorsport and the thing that sets Formula E apart is that it has purpose. Getting a new multi-million-pound central midfielder in a football team won’t change the planet… and it’s a waste of money! That’s what I learnt and that’s contributed to the overall vision of Formula E in making a positive social impact.
What is your ultimate vision for Formula E?
My ultimate vision is to make it more mainstream. Not just the racing, but electric cars themselves. Formula E is already arguably the most road-relevant championship, as well as the fastest-growing in terms of manufacturers, fans and followers. Each one of those people is one step closer to buying an electric car and that’s the goal.
What were the biggest challenges in getting Formula E to where it is today?
Cashflow! It’s no secret we almost went bust early on, when we had to invest heavily, and some now say we’re approaching a billion-dollar valuation. Pardon the pun, but it just took time to get the wheels turning. We didn’t have anything to start with or foundations to build from. There were no cars, teams, drivers or cities. The biggest challenge was getting it off the ground and proving to people that we could do it. They clearly believed in the concept, because they bought into it, but it was about showing what was possible. The rest is history.
What’s your view on philanthropy?
I normally get asked the same questions, but I don’t think I’ve had this one before. So, thank you for mixing it up. I view philanthropy more as promoting people’s welfare and addressing problems causing it, as opposed to more obvious charitable donations. Philanthropy is about humanity and it is humanity that’s most at risk with the climate crisis. Everyone, including myself, keeps saying we need to save the planet. That’s not true; it’ll still be here long after we are. We need to make changes to save our way of living as we know it. Formula E is helping to support that.