Reflecting on a 2019 Conversation With Then-HPD President Ted Klaus
Feeling quite cynical about the impact of motorsports as a marketing exercise, I joined the NTT IndyCar Series as it rolled into WeatherTech Raceway Laguna Seca for its finale race in September 2019.
It was the 14th event I attended that year, and the concept nagged at me. Having the industry within arm’s reach weekend after weekend led me to wonder if the millions of dollars poured into IndyCar by its engine manufacturer partners Chevrolet and Honda genuinely led to a significant increase in car sales.
Additionally, on The Apex, we were grappling with the details of the new engine formula due to enter competition in 2022. With a single third-party supplier set to provide an identical hybrid unit for Chevrolet and Honda to pair with their engines, could the manufacturers really learn anything on the racetrack to bring to their electrified road-going vehicles?
We wondered how exactly they would promote hybrid IndyCar engines that they weren’t themselves turning hybrid. And what about the entirely reasonable stipulation a new engine partner may have about racing with bespoke hybrid components in their IndyCar engine?
After his participation in an Indianapolis press conference left an impression on me, I cornered Honda Performance Development President Ted Klaus at my first (and, as it would turn out, last) chance: qualifying day at Laguna Seca.
I must’ve figured there was no sense in wasting time, as I started by asking Klaus about the intersection between the engine manufacturers and the single-source hybrid solution.
Spec Hybrid System Still Potentially Valuable to Manufacturers
Beyond recognizing his intelligence, in my short time knowing Klaus, I found him to err on the side of positivity endlessly, and he did so right from the start of our conversation.
“I think, as far as the hybrid racing components being single source from outside Honda, that’s not such a big issue because those components can be tested and verified and guaranteed,” Klaus said. “These companies have already invested money in racing-specific components. Honda, our teams and the IndyCar Series can benefit from return on that invested capital.
“For us, we want to make fast race cars even faster, so our associates get to take — ‘Okay, now I get to take a motor generator unit that has a certain battery capacity and I get to integrate that into an overall drive-force profile.’ So, just acceleration.
“So how can we harvest energy under deceleration? How can we add energy back in? And so we haven’t sorted all this out, but we’re working in conjunction with INDYCAR, and certainly, we’re bringing our voice so that it can be the most relevant for our associates. And since we’re partially integrated into Honda R&D and work collaboratively with them, that’s part of a larger discussion.
“So even though we’re not making the electrical components, we will be, we hope, in charge of integrating the system performance.”
I recall my ears perking up at “we hope,” but I should’ve asked how exactly the hybrid engines can be more relevant for Honda’s “associates.” I also wonder what “partially integrated into Honda R&D” might mean in more detail.
Klaus clarified the manufacturers’ role by asking me, “Who’s going to control the total integration of those two power-generating units?” At that, I recognized out loud that “it still comes down to the manufacturers,” and he continued:
“That’s what we are advocating, and that’s what we will keep advocating. There are good discussions going on with INDYCAR and the manufacturers, and I think we’ll work through it as we’re working now kind of through the end of the year to put those building blocks in place.”
Even listening to and reading this back, I’m surprised at the apparent need for Chevrolet and/or Honda to push for even minimal control of their hybrid integration.
Klaus provided an example or two of the advancements Honda can develop, such as deceleration energy harvesting. Implementing that may be enough for Chevrolet and Honda to, for instance, produce advertisements about their hybrid racing endeavors without it being a white lie. However, the question still stands whether that’s enough to spark new manufacturer interest.
So far, Klaus and I covered the hybrid integration angle. Where we went next touched directly on the primary question that burned for me throughout 2019:
Does Racing Even Matter?
Given the steep investment required to participate in a series that sends teams every which way from St. Petersburg, Florida, to Monterey, California, it was abundantly clear to me that this is about more than who reaches the checkered flag first.
Witnessing the inner workings of Pato O’Ward struggling to find his footing in IndyCar, despite starring in his Sonoma Raceway debut at the end of 2018, was the start of this. Of course, nothing about North America’s premier open-wheel championship should be easy or perhaps even fair, but so much seemed contingent upon the goodwill of companies — people — spending money they didn’t have to.
I was concerned that the current crop of corporate partners prevalent in the paddock (most, somewhat worryingly, being business-to-business connections) would eventually decide they weren’t receiving enough value from their presence in IndyCar and leave.
Klaus offered some insight.
“It’s very important that everything we do in racing — this goes all the way back to why Mr. Honda wanted to race,” he began. “I want to give relevant challenges to my people, my engineering machinists, my simulation people — everyone. My marketing people, too. So it has to be an integrated approach.
“I would say it this way: Honda isn’t separately investing in these marketing efforts and these marketing efforts. Motorsports marketing is integrated into our total marketing approach. And because we have it at the core of who we are, we actually can be authentic thought leaders.
“When we market to IndyCar, there’s an authenticity to that. And obviously, we don’t know much about the NHL or NFL, but it’s legitimate that we’re there marketing because we’re trying to tap into people that are performance minded.
“It’s just nice to see ongoing evolution. It keeps evolving, the technologies are going to keep changing, but the commitment is there, so I think that’s the key message.”
Does this hit squarely on my concern and put it to rest? Unfortunately, I can’t say that it does. But, as one party expressed at the end of this conversation between one of IndyCar’s top executives and a 20-year-old kid, there’s much more to discover before putting a wrap on this subject — which remains true today.
I asked my last question, point blank: “Is there enough you can do when you go to the office Monday through Friday to impact what happens at the racetrack?”
Klaus responded with, “Oh yeah,” repeated three times, with both words drawn out for effect.
At that, I admitted: “I feel I have a lot to learn there.” Much to my excitement, Klaus added, “I’d be happy to continue that conversation.”
I said, “I’d love to,” and hit the stop button on my recorder.
Klaus retired as HPD’s president in December 2020 and, to date, the 2019 Laguna Seca finale was the last IndyCar race I attended as a member of the media. In a particular moment I haven’t forgotten, Klaus recognized me near the podium after the race and patted me on the back with a smile — while hoisting the manufacturer’s championship trophy with his other arm.
From the technical details behind the partial electrification of IndyCar to overarching themes regarding the value brands receive from racing participation, many of the topics from 2019 remain open for exploration on The Apex.
Unfortunately, one thing lost in the turbulent period since that season-ending race is the chance to discuss this more with Klaus. While the topics remain fodder for our writing, it’s a reminder that nothing lasts forever.
