When I first heard BYD was considering entering Formula 1 or the World Endurance Championship, my immediate reaction was simple: this feels like a stretch.
BYD has zero motorsport presence. Their racing experience amounts to competing in China’s domestic rally championship starting in 2014. Meanwhile, they’re supposedly eyeing a grid where teams like Mercedes spent $484 million annually before budget caps kicked in.
The infrastructure gap alone is staggering. To compete at the top levels of motorsport, BYD would need a presence in the UK’s Motorsports Valley, hundreds of experienced specialists, and the willingness to burn through hundreds of millions of dollars just to get competent. Even if they only concentrated on powertrains and associated components, this would take years of concerted effort.
So why float this idea publicly if the barriers are that high?
The Mindshare Problem Nobody Talks About
Few people outside China even know BYD makes automobiles. Despite selling 2.26 million battery-electric vehicles compared to Tesla’s 1.63 million, Western market brand perception still lags far behind the product reality.
BYD’s own executives acknowledge this gap. The company explicitly admits that raw sales volume hasn’t translated into the kind of brand prestige they need to compete in premium markets.
Motorsport could theoretically help with global mindshare. But here’s what doesn’t add up.
Formula E was supposed to be the exact vehicle for EV manufacturers to build credibility. We watched Audi, BMW, and Mercedes all abandon the series between 2020-2022. BMW stated they had “essentially exhausted what can be done with this technology” before packing up and leaving. Mercedes chose to concentrate on F1 instead, calling it “the fastest laboratory for developing sustainable technologies.”
McLaren just announced its withdrawal from Formula E after only three seasons, choosing to focus on WEC Hypercar instead. The series’ €12 million budget cap makes it relatively easy for teams to come and go as they please, but this reveals Formula E’s fundamental problem: manufacturers view it as disposable rather than strategically essential.
Why would F1, which costs exponentially more and remains mostly combustion-focused, work better for BYD than Formula E worked for other EV brands?
The Haas Route and the Invisibility Problem
BYD could go the Haas route and partner with an existing team, concentrating mostly on electrical systems. They could leverage their knowledge of battery storage and electrical drive components with another manufacturer.
But Haas partnered with Ferrari on powertrains and still struggles for respectability after eight years.
If BYD becomes a technical supplier to a midfield team, do they actually move the needle on consumer perception? Or do they just become an invisible technical partner that nobody associates with the racing?
Any partnership would need significant marketing, sponsorship, and promotions to build awareness. WEC might make more sense for learning, but F1 has many more fans. That’s the tension.
The Premium Perception Paradox
Mercedes, Ferrari, and Porsche all had premium cachet in Western markets before they entered top-tier racing. Those brands already had established reputations and mindshare amongst the public.
Does motorsport actually create premium perception for a brand that consumers currently see as cheap Chinese EVs? Or does it just burn money trying to convince people of something they don’t believe?
BYD’s profit margins are already collapsing under global expansion pressure. The company reported a 33% drop in third-quarter 2025 profit while ramping up overseas expansion. Founder Wang Chuanfu admitted competitors are “catching up and eroding BYD’s technological edge.”
Industry expert Bill Russo stated: “BYD is now in a scale-before-profit phase internationally. This inevitably weighs on margins. The trend of BYD’s profit slump has not bottomed yet.”
Being in WEC or F1 could help if BYD stayed in the series for a while and showed results. The problem is, only one team can win. If a company spends hundreds of millions and doesn’t achieve results, corporate boards will look at motorsports as a vanity project.
The Commercial Value Wildcard
There’s one scenario that changes the equation entirely: bringing Chinese fans to the series.
F1’s 2026 Chinese Grand Prix set a new attendance record of 230,000 spectators. FIA President Mohammed Ben Sulayem openly stated Chinese manufacturer entry would be “the next logical step” and “about sustaining the business.”
If BYD enters and suddenly millions of Chinese viewers tune in, they become valuable to the series itself in a way that buys patience even with poor results. They could essentially become too important to the commercial side to fail on the sporting side.
Think about the Dallas Cowboys. Even with losing records, they remained the most valuable franchise in the NFL partly due to their historical popularity in Latin America. When they play away games either inside or outside the US, legions of fans pack the stadium. Millions more watch on TV.
But the Cowboys built that fanbase over decades of winning Super Bowls first.
BYD would need some sort of hook to draw fans in. Hiring Chinese driver Zhou Guanyu could help. Getting Chinese sponsors onboard and making it easy for fans to watch would help too. It would take time and results though, which motorsports doesn’t always afford teams.
The Economic Reality Check
Can BYD afford to lose $200-300 million annually for five years while they figure this out?
Maybe. Chinese companies are less concerned with turning a profit than keeping factories open and having people employed. The PRC has historically undercut competitors to effectively buy market share.
BYD generated $107 billion in revenue in 2024 with a net profit of approximately $5.8 billion, yet the company spent 13 times more on R&D than its net annual profit over 14 years. This aggressive spending pattern reveals a company prioritizing market dominance over profitability.
But here’s what worries me most about this approach.
The PRC’s economy is built upon a foundation of cheap credit and state control. This went badly wrong for Japan in the nineties, which suffered two decades of economic stagnation coupled with demographic decline. The PRC faces the same prospects except on a much larger scale.
As long as factories turn out product that can be dumped on global markets, the PRC will be okay. The Chinese government underwrites this with credit and the savings of its citizens to keep the economy growing. If that slows down though, the whole house of cards could collapse.
The Regulatory Wildcard Nobody Sees Coming
BYD’s entire calculus depends on whether electrification in motorsport even survives the next regulatory cycle.
The 2026 F1 power unit regulations mandate a 50:50 split between internal combustion and electrical power, with the MGU-K delivering 350 kW to the rear wheels. Approximately 50% of power output now comes from the electric motor.
This timing creates a strategic window for BYD. For a company that builds its own batteries, motors, and power electronics in-house, the increased emphasis on electrified powertrains makes F1 research far more relevant to its core business.
But there’s a desire by many in F1 to return to simpler racing, possibly with normally aspirated engines running on biofuels. If F1 walks back toward biofuel V8s or V10s by 2030 or 2031, BYD’s core competency becomes irrelevant.
Electrification may stagnate, grow, or go away altogether.
What BYD Will Actually Do
I think the wise move is to become a technical supplier and learn that way. In time, they could see where things are going in motorsport.
If BYD gets involved in GT racing, WEC, or some other series where there’s a desire for electrification, then motorsport involvement could make sense. A WEC entry as a powertrain partner with a struggling manufacturer who needs battery expertise would show they’re serious about learning and establishing a presence in international motorsports.
They would use it as a stepping stone like Mercedes, Renault, and Porsche did in the past. It would enable BYD to accumulate knowledge without the glaring spotlight of competing in F1 shining on them.
At some level, I think they have a desire to get on the world stage. The question is at what level of commitment and expenditure.
BYD is reportedly “more inclined toward the acquisition route” than building a new team from scratch. Alpine appears as a potential target since it competes in both F1 and WEC, though Alpine announced it will leave WEC at the end of 2026.
BYD’s interest in motorsport right now might actually be a hedge. They want to gauge if there’s a worthwhile opportunity and lock in partnerships while electrification is still the assumed future, before the regulatory winds potentially shift against them.
If they get involved, they can either increase their involvement or dial it back.
That’s the smart play. Whether BYD actually makes the smart play remains to be seen.
