BYD face just one major ‘obstacle’ as F1 franchise takeover on cards, says finance expert

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Chinese car manufacturer BYD has been linked with a potential Formula 1 entry, but face one major ‘obstacle’ in becoming the sport’s 12th team.

BYD was founded in 1995 and is now the biggest private-sector employer in China, as well as one of the world’s biggest manufacturers of electric cars, and as the Chinese Grand Prix approaches, stories have started to emerge about their interest in the sport.

Formula 1 welcomed Cadillac to the grid this season as an 11th manufacturer, with Audi taking over Sauber during the winter break.

Amid the rumours about BYD, which car brand do you want to see join the F1 grid next?

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As the biggest seller of cars in China, surpassing Volkswagen, BYD would be another huge name to add to F1, and would lean into the hybrid power units that teams are now required to use.

Formula 1’s Concorde Agreement allows for a maximum of 12 entries, although given how much resistance Cadillac met before their debut, it might be even tougher for BYD to get on the grid.

F1 Oversteer exclusively spoke to GRV Media’s governance and finance expert Adam Williams, and he explained the ins and outs of BYD becoming China’s first F1 manufacturer.

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BYD’s major ‘obstacle’ to becoming a Formula 1 team would be the cost of entry

Williams explained BYD’s stance on joining Formula 1, as well as the pros and cons and said: “This makes complete sense on paper. BYD are expanding beyond China, and entering Formula 1 in some capacity would give them instant cachet globally, particularly in the high-income areas where the sport is most popular, which interweaves with the markets in which they are trying to sell their cars.

“They’re trying to widen their appeal and produce more luxury cars as well as their specialism in electric and hybrid – and with F1, you get that kind of luxury brand association by default, as well as association with premium, best-in-class engineering. Consciously or unconsciously, that makes your company stand out as one consumers think they can trust when they are making a decision about which car to buy.

“The only obstacle to actually entering F1 as a new franchise is cost. It would essentially be a marketing move, and they have a relatively small marketing budget from what I can glean – compared to some of the other big beasts in F1, at least. It would go into the accounts as a business acquisition, but it would, for all intents and purposes, be a marketing manoeuvre. It’s a very expensive billboard, essentially.

“However, it would be a safe investment in my view. And the company is incredibly cash-rich. They will make a capital allocation assessment – could the hundreds of millions of dollars it would pay in start-up costs be better spent elsewhere? It’s a bet that they can afford to place. Losses are limited by the cost cap, and, in the long run, most teams will be profitable to investors. Valuations are rising every year, which is how most investors make their money: upon exit, or after selling significant minority stakes.

“Whether they will choose to go all-in with F1 or a more junior competition, I don’t know. But as I say, it would make business sense for them to do the former, looking at it from the outside.”

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BYD exploring other avenues to entering Formula 1 including Aston Martin takeover

With F1 centred around the UK’s ‘Motorsport Valley’ in Oxfordshire and the surrounding areas, it would be fascinating to see how BYD would fare against teams like Ferrari, Mercedes and Red Bull.

Building up a team from scratch is notoriously difficult, as Cadillac are learning this season, but there could be another option.

It’s been suggested that BYD are exploring taking over Aston Martin, with the Silverstone-based outfit in dire straits at the start of the 2026 season.

Lawrence Stroll has overspent on Aston Martin’s F1 project already, and if he decided to sell, it would be interesting to see how the wider F1 world would react to a bid from BYD.

Formula 1 is keen to continue expanding worldwide, with races in Africa and Asia being explored in the near future.

However, a team from China could open the floodgates to millions of new fans, quickly making up the shortfall that teams would experience by splitting prize money with a 12th entity.