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General Motors has taken a major step towards competing in Formula One car racing under its Cadillac brand, in a ringing endorsement of the sport’s expansion in the US.
F1 said on Monday it had reached an agreement “in principle” with the US carmaker under which Cadillac will become the 11th team on the series’ grid from 2026.
It is a significant breakthrough in the talks between the two sides, although GM’s application to join the FI world championship is formally still ongoing.
Under Liberty Media, which has owned F1 since 2017, the sport has expanded in the US, with new races in Miami and Las Vegas.
GM’s plan to join F1 highlights its attractiveness not only as teams have soared in value due to the growth of the sport, but also because of limits placed on much they can spend on developing cars, thereby protecting shareholders from runaway costs. Teams now attract valuations north of $1bn each.
GM president Mark Reuss said it was an “honour” to join F1 and described the sport as a “global stage” to showcase “engineering expertise and technology leadership at an entirely new level”.
GM has partnered on its planned entry into F1 with TWG Global, led by Mark Walter, who is also chief of investment group Guggenheim Partners.
Walter has a controlling stake in the Los Angeles Dodgers baseball team and a minority shareholding in the LA Lakers basketball franchise. He was also part of the group that acquired English Premier League football club Chelsea for £2.5bn in 2022.
The 2026 F1 world championship will be the first to be contested under new regulations that will shake up the way teams design their cars.
GM intends to become a “full works” F1 team by the end of the decade, but will initially require an engine from a third-party supplier.
“With Formula One’s continued growth plans in the US, we have always believed that welcoming an impressive US brand like GM/Cadillac to the grid and GM as a future power unit supplier could bring additional value and interest to the sport,” said Liberty Media chief Greg Maffei.
TWG owns Andretti Global, which competes in the Formula E and IndyCar motorsport competitions.
The Andretti name carries huge weight in racing lore. Mario Andretti, the last American to be an F1 champion, will be a director on the Cadillac team’s board.
However, F1 in January pushed back against an application by an Andretti team to join the grand prix grid in partnership with GM.
F1 said at the time “the presence of an 11th team would not, in and of itself, provide value to the championship”.
Some existing teams raised concerns about diluting F1 prize money by expanding the grid beyond 10 teams.
Current F1 rules would require a new entrant to the series to pay an anti-dilution fee of $200mn, to be shared among existing teams as compensation.
But with those rules set to elapse before 2026, two people with knowledge of the matter said the fee under discussion to be paid by GM and TWG as a condition of entering a team is about $450mn. F1, GM and TWG declined to comment.
F1’s opposition to Andretti’s application in January attracted regulatory scrutiny.
Liberty Media disclosed in August that the US Department of Justice’s antitrust division was investigating F1’s “conduct” in relation to the Andretti application.
Maffei subsequently said the F1 decision “was in compliance with all applicable US antitrust laws”.
F1 said on Monday it had “maintained a dialogue” with GM and TWG about the viability of an entry since turning down the original Andretti application.
“Over the course of this year, they have achieved operational milestones and made clear their commitment to brand the 11th team GM/Cadillac, and that GM will enter as an engine supplier at a later time,” F1 said.
Additional reporting by Claire Bushey
