PRUETT: IndyCar's made the right call, for the wrong reasons

PRUETT: IndyCar's made the right call, for the wrong reasons

I hate to say it, but IndyCar made the right call in ditching the 2.4-liter twin-turbo V6 engines it first announced back in 2018. After a decade of listening to the drone of the same old 2.2-liter turbo V6s, I couldn’t wait to have something cool and new and more powerful to experience. But that idea has been jettisoned after two years and untold millions were spent by Chevy and Honda on designing, building, and testing the new-for-2024 2.4-liter units.

So how did we get here, more than four years after the 2.4-liter ‘fast and loud’ engine formula was presented to the world? The root of the decision to stick with the 2.2s and turn them into hybrids lands squarely on IndyCar’s inability to sign a third engine manufacturer.

If a third automotive brand were readying engines for 2024 we wouldn’t be having this conversation, but there’s nobody in the pipeline to turn IndyCar’s faithful duo into a trio. And while we know IndyCar has met with everyone from Hyundai to Lamborghini to Porsche to Toyota – and some expressed greater interest than others – IndyCar’s longstanding failure to replace Lotus, which exited after a single disastrous season in 2012, has led to the 2.4-liter formula’s undoing.

Those failures happened across multiple IndyCar presidents, CEOs, and owners, so there’s no one person or entity that is solely responsible. But we can’t ignore the fact that in lacking a third manufacturer to make the 2.4-liter supply a three-way share, Chevy and Honda were pushed into an untenable situation as 2024 approached.

Back in September, I had long, separate sit-downs with Chevy IndyCar program manager Rob Buckner and Honda Performance Development president David Salters, both of whom shared the same strong messages about having to limit their 2024 engine leases to a smaller number than IndyCar wanted. Although Buckner and Salters were reluctant to give an unmovable cap on numbers, it was well known each brand communicated to IndyCar that 12 or less was what to expect for full-season 2.4-liter leases. Despite mentioning 12 leases in print, one brand was known to be fond of something closer to eight to 10.

Additionally, and most importantly, their agreement to continue providing engines in this new 2.4-liter formula was budgeted around IndyCar finding a third manufacturer. With three brands, each could cover between eight and 10 cars and easily keep the series stocked with full-time entries at or near 30 for the season. Next year, in what would have been the 2.2’s final year, we’re looking at 27 full-time entries.

But without that third manufacturer, Chevy and Honda would need to go beyond 12 leases apiece just to hold onto the existing 27 entries after the 2.2s were retired. And both brands, in loud and clear terms, let IndyCar know that they did not have the budgets to develop the new 2.4s, take on developing the spec energy recovery system (more on that later), and add 25- to 33-percent more engine leases to fill in for that missing third manufacturer. Financially, something had to give.

Their 2.4-liter budgets were set at producing and heavily subsidizing leases to cover one-third of the full-time grid, and no amount of begging or pleading would make their brands unleash vast new budgets just to compensate for IndyCar’s missing engine partner.

Manufacturers budgeted for the new engine formula on the basis that they’d each supply a third of the grid, but a third OEM never materialized. Walt Kuhn/Penske Entertainment

As a result, the restricted number of 2024 engine leases were becoming a significant crisis for IndyCar. After stretching the grid to 27 cars in 2023, Chevy and Honda combining to offer no more than 24 leases in 2024 was going to come with the loss of at least three entries. And if, by chance, either brand went below 12 leases, the grid would start veering closer to 20.

“I think early on, going all the way back to 2011, us and Honda were both planning on eight full-time entries; a 24-car field with three manufacturers,” Buckner told RACER at the Portland Grand Prix in September.

“So we were all very optimistic that that’s how the 2.4 would work out. And now it’s very clear that the 2.4 will debut in 2024 with two OEMs. And if we know we have a healthy car count, you end up roughly at a dozen. The thing that’s out of sight for fans is when you have the more cars, you have the more parts and engines you have to have in your pool back at the shop. And the initial cost of those 2.4 liters is very high. As an engine supplier, we’re very prepared to run a dozen.”

It would be easy to pile on Chevy and Honda for being unwilling to go beyond 12 leases, but as Salters shared in a late September visit to HPD, sometimes IndyCar’s engine manufacturers are viewed in the wrong light — as blank checks who are responsible for covering the series’ shortcomings.

“We’re not here to make a racing series,” Salters said. “We’re here to promote through a racing series. But we’re not here to make the racing series. That’s not our job. That’s somebody else’s job. We’re here to support it, but only if it gives us something back. And we have to also show a return on investment, and that needs to be people watching.”

For a variety of reasons, the costs to develop and supply the 2.4-liter hybrid engines is considerably higher than what it takes to build and support the 10-year-old 2.2-liter motors. The conundrum, as Salters explains, comes from having more expensive new motors to create with a budget that hasn’t increased (for IndyCar). HPD’s annual budget must cover all of the series where Honda and Acura compete.

On average, a 2.2-liter IndyCar engine lease from Chevy or Honda runs in the $1.3 million range per season and comes with five engines per entry. Each lease also comes at a financial loss for both brands, which means a solid portion of their yearly budgets are consumed by absorbing the six-figure losses with every IndyCar lease.

It’s believed each 2.2-liter lease costs the manufacturers closer to $2 million apiece, and the 2.4-liters are said to take the per-lease losses into a new territory.

Honda and Chevrolet already supply engine leases at a loss, and a 50/50 split on the new 2.4l formula would have taken those losses to new levels. Phillip Abbott/Motorsport Images

“We get given a set amount of funds,” Salters said. “That’s it. After COVID, we all had to tighten our belts and we did it voluntarily because we want our company to survive. So COVID happened and budgets went down and we just have a finite amount of money. And when we make these engines, one thing that is interesting is there’s a lease fee for the engine. It costs us, for the 2.4, three times more per lease.

“We have departments that make stuff, we order stuff, and with the global supply problems we’ve all heard of, everything just went up 30-percent in cost, at least. So we have this pot of money. And I can’t ask for any more. I’ve tried. And quite rightly, we got other things we do here. We also get really well looked after by Honda. But we have only so much money that we can spend, and we spend it all. We make sure we spend it all because we’re trying to be as competitive as we can. But we only have this one pot of money. That’s it.”

Put it all together, and Chevy and Honda reached their spending limits on IndyCar. And those limits meant that if the 2.4-liter hybrids replaced the 2.2s, a 27-car grid in 2023 was in jeopardy of becoming 20, 22, or 24 in 2024. And if that’s problematic, let’s not get into what the Indianapolis 500’s traditional number of 33 starters might have looked like; it certainly wasn’t going to be 33.

Then we come to a newer crisis facing IndyCar, Chevy, and Honda, and that’s with the new ERS units made by MAHLE. It would be generous to say the oft-delayed units have been problematic, mostly on engine dynos, and have set the development of the 2.4-liter hybrid package well behind. Issues were so frequent and so rampant, Chevy and Honda stepped in and pressed IndyCar to let them – working in tandem – rectify the problems. And, moreover, to help resolve the greatest concern that was emerging: mass-producing the ERS units.

Separate from the need to dial down their engine leases to fit within their budgets, the mounting difficulties with ERS meant going hybrid in 2024 would only happen if IndyCar’s two engine partners became centrally involved in fixing issues and actively helping to manufacture ERS componentry to ensure the entire field has ERS units available.

Multiple sources have told me ERS units modified by Chevy and Honda have already been tested, and in particular, the latest version is said to have completed a lot of trouble-free miles, which is encouraging.

Circling back to the budget limitations, tackling ERS development to help IndyCar stay with its hybridization plans for 2024 was never part of the funding received by Chevy or Honda from its corporate hierarchy. Since hybridization is the most important part of IndyCar’s future for both brands, halting work on the 2.4s and shifting budgets to pay for solving IndyCar’s ERS problems was the only answer.

Holding onto the old motors was done in the best interest of the paddock. If the new engine formula went forward, car counts would shrink and one or more teams might be gone from the series. This is where IndyCar was headed — in the opposite direction of growth — and teams were already starting to sweat over the need to trim from four cars to three, or three to two, to fit within their manufacturers’ cost-related downsizing. And then the ERS issues emerged and the need to forsake the 2.4s became the only option to go hybrid.

The looming field-size crisis has been averted by giving the 2.2s a longer runway, and who knows how long they’ll stay in service. Going hybrid with the old motors won’t be cheap, but it should protect the paddock and ensure no entries are lost.

So, begrudgingly, this is what had to happen, all due to the lack of a third engine manufacturer, which set this painful chain of events in motion. And here we are again.

It was the right move for IndyCar to make, but once more, we’re left talking about taking another step back instead of making a big step forward.