The winners and losers of McLaren's switch from Renault to Mercedes

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On the face of it, McLaren's decision to switch from Renault engines to Mercedes seems like a straightforward upgrade. Renault power has secured just 12 wins under the current engine regulations, while Mercedes has secured 85.

Renault has undoubtedly made progress with the performance of its power unit this year, but reliability is still a long way off Mercedes and that, ultimately, results in grid penalties. Each driver is limited to a set number of power unit components per year and across all types - engine, turbo, MGU-H, MGU-K, battery and control electronics - Renault has used 39 more than it was supposed to across the four cars it supplies, while Mercedes has only exceeded its joint quota across its six cars by 10 components so far this year.

Renault is working on a revised power unit for 2021, but if the past six years are anything to go by, the odds are Mercedes will have the edge.

"For me, Mercedes has clearly been the benchmark in this hybrid era in terms of powertrain," McLaren team principal Andreas Seidl said. "It was one of the main reasons why we wanted to make this decision from 2021 onwards, at the same time Mercedes as a team together with this power unit is clearly the benchmark in Formula One nowadays and for me the best thing is to have the same powertrain in our car as the best team in the paddock, because then there is nowhere to hide for us.

"History has shown how Mercedes is working with their customers in terms of power unit supply, so I have absolutely no worries that we won't get the same treatment as the works team."

What was on offer from Renault?

The two offers from Mercedes and Renault were quite different. The Mercedes option is very much a plug-in-and-play deal. The supply will only extend as far as the engine -- the possibility of adding the gearbox to the mix was never discussed -- and McLaren has vowed to remain completely independent from Mercedes.

Renault was offering a much wider-ranging deal. The French manufacturer is the only works team that is not fighting for victory in F1 at the moment and the gap to the front is still large. McLaren also has ambitions of closing the gap to Mercedes, Ferrari and Red Bull over the coming seasons and Renault felt that by collaborating beyond engine supply with its British customer team, the two could close the gap together.

Ferrari's customer team model with Haas and Alfa Romeo has highlighted the potential gains of teams working together for mutual benefit. In those relationships, Ferrari is very much the dominant partner while Haas benefits from a low-cost business model and Alfa Romeo benefits from significant sponsorship from Ferrari's parent company.

That sort of hierarchical relationship would be of no interest to McLaren, but Renault was proposing a partnership on equal terms. Neither McLaren nor Renault have a factory infrastructure to rival the top three teams, but were they to pool resources and share certain parts, there's a chance they could close the gap. At least, that was Renault's thinking.

"Our proposal was very much more about a partnership in which we would share lots of parts, engine integration, chassis installation, but not just that," Renault team boss Cyril Abiteboul said. "For me, the objective of that relationship could have been to work on reducing that gap together, so creating more synergies about equipment, installation and facilities.

"Also, looking at the way Formula One is going to evolve, with standard parts, open-source parts, prescriptive design parts, there are a number of opportunities to join forces and try together, while still competing on track, try together to reduce the gap to the top. That was our approach.

"That's why I'm talking about a strategic partnership, which doesn't mean them becoming a junior team or B-team of Renault -- obviously that was not going to happen so we didn't even consider or try that, but our approach was not really of interest for McLaren.

"It's not a critique, it's a fact. And therefore, on that basis, we didn't elect to race to the bottom. We will stick to our principles, our values and also to what we believe is the value of our technology and our engine and accepted the associated risk and in particular the prospect of losing McLaren."

That could be read in a negative tone: the bitter words of a partner spurned, an engine manufacturer licking its wounds as it recalibrates to a new world with just one team, its own works team, on its order books. Losing McLaren means two fewer cars on the grid using its engines and less money coming in to develop the engine. It's a lose-lose situation, and on top of that the plan to collaborate with McLaren to get to the front lies in tatters.

But Abiteboul was keen to sugar-coat the situation. Sure, the loss of two cars running its engine is a hit, but with relatively mature engine regulations it's not like the power units on track are prototypes, whose development is dependent on an insatiable hunger for track mileage. What's more, Abiteboul insists Renault was not benefitting financially from the McLaren deal.

"We have no interest in a relationship that doesn't bring something to the party," he said. "From an economic perspective, it brings nothing. From a marketing and communications perspective, let's be honest, it's more negative than positive: if you are beaten you are a wanker and if you are beating them then your technology is not on a parity level!

"In all cases there is nothing in it for the supplier. Because there is stability in the regulations we have reached a level where we do not need to accumulate that data [from having two more cars on track] and frankly, it's not bad.

"It's a bit of luxury and I don't think we will be suffering. So on that basis we are not going to review our offer and start thinking about subsidising the sale because ultimately that's what it would have meant had we had to lower our price given our cost base.

"That's not something that we wanted, we had a certain set of ambitions and also we have some confidence in the new technology we have started to develop for 2021 and, frankly, if there is no particular appetite for a strategic partnership we have no particular interest to share what we believe could be a performance differentiator in 2021."

So why did McLaren turn the Renault offer down?

"You know the world of Formula One is going to change in 2021, and I think that is where we are focused now with this decision," McLaren CEO Zak Brown said. "I think some of those areas where you can collaborate today, you're not going to be able to in the future.

"I think McLaren want to stand on our own two feet and be an independent team, as we always have been, so we're going to continue to work in that direction. I think the regulations are going to support that kind of independence, maybe more so than today."

What's in it for Mercedes?

Unlike Renault, Mercedes is expecting to benefit from having two more cars running its engines as well as the extra income of a third customer.

Mercedes and Renault have quite different engine programmes, with the German brand making a lot more of components in-house compared to Renault that buys in from suppliers. Combined with the economies of scale of producing engines for four teams and the economic deal is sweeter. What's more, tighter restrictions on the use of engine dynamometers for 2021 means Mercedes will not have to alter its production capabilities to accommodate McLaren as the units that would previously have gone to dyno testing can now go in the back of the McLarens.

The biggest question raised from Mercedes new deal was whether the engine side of the team was preparing for a life without its works team by taking on a replacement customer. There has been speculation Mercedes could leave F1 if it doesn't get what it wants from the 2021 rules package, but Wolff was quick to tackle that theory.

"No the two are not linked," he said. "I think we have a strong set-up as an engine suppler, which goes back a very long time and we have a works team that has been doing well and both have married jointly and independently.

"So just to avoid any misunderstanding, this is not a point where we could spread our bets and say we could stay as an engine supplier and not as a works team, this is not what I am saying, we enjoy being a works team."

The only danger for the sport of a whole is if the Mercedes board changes its mind and pulls out wholescale, leaving three teams without an engine supplier. But that, of course, only serves to strengthen Mercedes' arm at the negotiating table when dealing with the sport's promoters.

What next for Renault?

While Mercedes and McLaren are happy with their deal and the future of their teams, a question mark hangs over Renault. Without any contracts keeping it tied to F1, it's never been easier for the underperforming manufacturer to walk away from the sport.

"Supplying or not supplying McLaren is not going to turn things upside down," Abiteboul said. "We will remain in Formula One providing it continues to make sense for Renault as a business, from a marketing strategy perspective and also based on the evolution of the sport.

"There is the important milestone for 2021 at the end of October, so no we will continue to monitor that evolution and right now all the indications are pointing in the right direction because it's all pointing towards an improvement of the business case and value proposition for our team. If we are here today we have no particular reason not to be here tomorrow, provided we stick to the principles that have been set out."

But if Renault doesn't like the way the sport is going, it could also use the threat of pulling the plug as a political tool of its own.

"I think you're right," Abiteboul added. "We just need to make sure the governing body of Formula One sticks to the principles that have been set out, because there is no damper."