Malaysia’s anticipated return to Formula E has been dropped after the country withdrew from hosting duties due to huge financial demands.
Malaysia has dropped plans to host the final race in the Formula E world championship after local partner Sports Tech Holdings and Formula E failed to agree on the financial aspects to hold the race.
The country was scheduled to begin the electric single-seater racing championship’s season-ending race annually from next year until 2030 after Sports Tech secured the rights for the event earlier this year.
According to Sports Tech, negotiations failed due to a huge rise in the rights fee and an unexpected escalation in commercial charges following its decision to move the venue from a city circuit in Kuala Lumpur to the Sepang International Circuit (SIC).
Formula E reportedly wanted it to be a street race close to the capital city of Kuala Lumpur, only for Sports Tech Holdings to make the venue change over technical challenges.
Sports Tech CEO Wan Agyl Wan Hassan said that the costs of holding the race were too high, while the potential returns were limited.
“Our decision to step back from this opportunity stems from differences in expectations regarding the event’s scope and financial framework,” he said. “The economic conditions and the scale of investment required did not align seamlessly with our strategic priorities or financial planning.
“The new race fees are beyond our financial capacity, and we did not want to financially burden the government. If there is no economic value, why should we continue?
“The significant upfront costs, coupled with our assessment of the potential returns, led us to conclude that a re-evaluation of our involvement was necessary.
“This decision reflects our commitment to aligning our ventures with Malaysia’s economic realities and our strategic objectives. We understand that this decision may disappoint the motorsports community and fans and we apologise for any anticipation this may have caused.”
Wan Agyl did not disclose the amount sought by Formula E as that could not be shared under a non-disclosure agreement between both parties, although the breakdown occurred following talks after the nation gave the green light for the race to happen last month.
Despite Sports Tech stating its disappointment at the finances, Formula E is known to contribute a significant amount per race, typically around $100 million. This figure has been publicised by other venues.
It was projected that the Malaysian round of the championship could inject some RM157.5 million into the local economy through visitor spending and create over 10,000 jobs. It was also forecast that the event could contribute RM6.73 billion to the country’s economy over the next decade.
Malaysia’s withdrawal is the nation’s latest setback in bringing back a single-seater world championship, with F1 having not raced in the country since 2017 also due to financial concerns.
The country has previously hosted Formula E races – in 2014 and 2015, it ran the Putrajaya ePrix at a specially designed street circuit in the administrative capital.
