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While explaining the engine limitations based upon cost saving to my brother last night, his immediate question was:

"Do they not spend more on R&D to make them last that long than just manufacturing 20 engines for the season? "

I didn't have an answer. I understand the amount of machine work that goes into each component, QC checks, and assembly time. But wouldn't the "mass production" of these engines not bring their own economy of scale?

With customer deals being $28M (roughly) for 10 engines for a customer team, shouldn't the cost come way down if they bought 40?

Or are the customer teams simply paying the lion's share of the necessary longevity R&D?

How many engines are built and blown up on the dyno? More than 10 for the manufacturer teams? Wouldn't that be better to just let them use a new engine every race?

Thanks!

The idea was to create a semi-stable engine. Before engine freeze, manufactures could introduce a new engine in every GP if they wanted to.

tpe wrote:The idea was to create a semi-stable engine. Before engine freeze, manufactures could introduce a new engine in every GP if they wanted to.

They've don't it since the 2007 freeze under reliability upgrades.

The question remains however...

Is it cheaper to watch 15 engines blow on the dyno after performing more than 1 GP worth of revs just to make 5 last a season, or lower the endurance requirements and watch full wick engines that are new at each GP?

I never quite understood this, they're saying they wanna cut costs by allocating fewer engines per car over the season, but in my view it would always be cheaper to make 21 engines that last one race weekend than 5 engines that last an average of 4.2 race weekends.
Good question, I hope someone can enlighten us on that.

Development costs dwarf production costs, because F1-level R&D requires expedited, resource-intensive work throughout a supply chain comprised of a myriad businesses that don't work for free (unless promotional considerations apply).

I think the idea behind the new hardware rules is to slow things down.

I also think it won't have much of an effect.

bhall II wrote:Development costs dwarf production costs, because F1-level R&D requires expedited, resource-intensive work throughout a supply chain comprised of a myriad businesses that don't work for free (unless promotional considerations apply).

I think the idea behind the new hardware rules is to slow things down.

I also think it won't have much of an effect.

As most of Formula One'ss regulations changes, which seem to consistently backfire in a terrible fashion.

I often wonder how much better of a job would apes do in place of the people currently in charge of the sport's regulations

Even if the final retail costs for customer teams were set in stone and was equivalent to a bag of peanuts the engine manufacturers would still have spent the same in R&D as those teams also want to win.

It doesn't matter what the layout/lifespan/technology specified is, if Merc/Ferrai/Renault/Honda have a budget of say £100m they will always spend £100m

The point of F1 is to win, not to save a few bob.

Facts Only wrote:It doesn't matter what the layout/lifespan/technology specified is, if Merc/Ferrai/Renault/Honda have a budget of say £100m they will always spend £100m

The point of F1 is to win, not to save a few bob.

Brand new engines at every race would guarantee faster performance turn around with less R&D investment into longevity.

Teams could not only win, but recover through the season if they are behind. Since we know the only thing that truly slows down development is rules that last long enough to allow all teams to converge on the only perfect solution, wouldn't speeding up that process help to level the field?

I think 1 engine per weekend would be great for 2017. The manufacturers have already sink the cost of longevity research, so maybe teams like Sauber can survive on 16 per season, but those with larger budgets can get an extra 10hp buy having a new one.

The true constructors championship is resource efficiency. The only real lessons they can apply to their real world business.

Zynerji wrote:While explaining the engine limitations based upon cost saving to my brother last night, his immediate question was:

"Do they not spend more on R&D to make them last that long than just manufacturing 20 engines for the season? "
Thanks!

There is at least a vague method to the madness.

The cost to a factory engine supplier (like Mercedes or Ferrari) to sell a season-long engine package to a customer team is not 1/2 or 1/3 of their total engine budget, rather it is the marginal cost of producing 10 extra engines (5 engines/car times 2 cars/team) after the R&D is paid for. The R&D is a sunk cost and has no relevance to determining price to an individual customer team. There is some, caution some, logic to requiring each engine to last longer because this drives up the R&D cost (which again is relevant to the manufacturer but not to customer pricing) but it conceivably lowers the marginal cost to the customer because now a two-car team needs just 10 engines per season instead of 42 like if they used a new engine every race weekend. This makes it cheaper for manufacturers to supply customers, no question.

The downside is that the marginal cost increase for producing an extra 10 engines (i.e. the actual cost of supplying a customer) does not necessarily have any relevance to what manufacturers charge customers. The marginal cost may be $10 million but they charge $20 million because that is the market-clearing price. Notice the market clearing price still has no connection to any underlying R&D cost.

Yes a muddled situation. I think the idea of requiring engines to last X race weekends came from Max Mosley when he was making a (pains me to say it) good faith effort to lower the cost of F1. The current Formula 1 status quo does not include the comprehensive financial reforms envisioned by Max Mosley but it does include some piecemeal legacy elements of that era. Thus the current combination of low supplier marginal cost (due to engines that last several race weekends) and sky-high engine package prices (whatever the market will bear from teams that want to compete in F1). Arguably the best conceivable combination for engine suppliers.

Thanks for the info!

One would still think that even sub contracting the production of the components would be relatively cheap to the hundreds of under utilized machine shops across the USA. I have managed several top quality ones over the years.

At the end of the day, I do feel that the artificial limitations are holding the sport from truly becoming epic.

Facts Only wrote:It doesn't matter what the layout/lifespan/technology specified is, if Merc/Ferrai/Renault/Honda have a budget of say £100m they will always spend £100m

The point of F1 is to win, not to save a few bob.

This is generally correct of course.

Although the facts suggest you can use the rulebook to cut engine costs.

e.g. During the "frozen atmo" era, engine development spend was undoubtedly lower than in the "let's have lots of new V10's/V8's" era.

Big teams would have loved to spend more but there were only limited upgrades attainable with the rules.

So engine technolgy stagnated and top teams just spent more in other areas of the car!

Not what I like to see at all ...

Zynerji wrote:

tpe wrote:The idea was to create a semi-stable engine. Before engine freeze, manufactures could introduce a new engine in every GP if they wanted to.

They've don't it since the 2007 freeze under reliability upgrades.

The question remains however...

Is it cheaper to watch 15 engines blow on the dyno after performing more than 1 GP worth of revs just to make 5 last a season, or lower the endurance requirements and watch full wick engines that are new at each GP?

Wouldn't they still blow 15 engines on the dyno trying the get them to last for 1 GP with higher power output?

If the manufacturers have $100m to develop a 750bhp* engine that lasts 4 races, wouldn't they still spend $100m to develop and engine which develops 850bhp* and lasts for 1 race?

*or whatever

Maybe, but the sunk cost is already spent to have the reliability, so spending $100m under a restricted system would probably have it's own limiting factors. You can't directly burn money to go faster.

And it would negate all of the driver penalities associated with the endurance formula.

I think it's a fallacy to assume that R&D costs would be lower on designing an engine that only has to last one race distance, versus designing an engine that has to last 5 race weekends. If the rules allowed single-race engines, they wouldn't just take the existing engines and say they're "good enough". Instead, they would spend a bunch on R&D to figure out exactly how much more power can be made with engines that only have to last one race. I suppose you might save some R&D costs in that shorter test cycles would use less fuel and oil - but you're not going to save anything on simulators or engineers.

Making the engines last 5 races, does likely reduce the parts and labor costs in building additional engines - which admittedly is small potatoes compared to the R&D costs, but the procurement costs are a bigger chunk of the costs passed on to the customer teams. Also, don't underestimate the marketing value in having engines which are seen as being more reliable (by lasting longer).