Denny Hamlin details the costs of NASCAR racing; Explains the sport’s business problems and offers solutions
“There’s not a league where the cost to compete is not covered, except for in NASCAR.”
For the 2022 season, NASCAR launched the Next Gen car. For the first time, teams had identical cars up and down the garage area.
Outside of leveling the playing field, there were other reasons for the change. One of those was NASCAR attempting to reduce costs on the team.
That hasn’t happened.
First, the costs of the Next Gen car have gone up significantly since the initial release. Inflation, labor and single suppliers are only part of that issue.
Denny Hamlin is a driver for Joe Gibbs Racing. He’s also a co-owner of 23XI Racing, a two-car NASCAR Cup Series team.
The Next Gen kit isn’t a complete LEGO set. Other pieces are needed to complete the machine…
Next Gen Budget
“It doesn’t actually put the car together. There’s still fasteners, brackets. If you buy the Next Gen car, there’s still hundreds of parts and pieces you either need to buy or manufacture. That actually puts the car together,” Denny Hamlin stated via his Actions Detrimental podcast.
“The Next Gen comes with a booklet of how to put it together. It comes with an instruction manual, this is hilarious. Kyle Busch called it the Walmart car or something. No, no no, this is IKEA.”
“Things like seat brackets, dashes, there is no mandate for that stuff. There’s a lot of other stuff that I don’t even know about.”
“When we initially got the budget for the Next Gen car. This was 2-2.5 years ago, the cost was coming in below what we were expecting it to be. It was around $225,000.”
“All in, right now, this is a rough estimate. With all the other stuff you have to purchase to actually make it roll, $350,000.”
“We’re racing Lambos out there! At the end of the race, I see a big crash. I roll back around like, ‘Please don’t be any of my cars.’ It’s such a big cost.”
Crash budget has increased
For 2023, NASCAR introduced changes to the Next Gen car, specifically to weaken it. Slots were cut in the chassis itself, specifically to make the car crush and absorb impacts with the wall.
“Our crash budget has gone up tremendously because we had to make safety changes. Now, when you hit the wall, you see the cars crushing. Well, it’s crushing expensive shit,” Hamlin explained.
“It’s worth it for us. You want driver safety. Whatever that cost, we have to do that.”
“When you have big rear end crashes, you probably will damage the most expensive part of the car which is the trans-axle. Which is $50,000.”
“The cars have gone up, the crash budget has gone up. Our budget as team owners has gone up. We’ve only been running the Next Gen a couple years, it has gone up, a lot since the beginning.”
Solution? Let NASCAR teams build the cars
Hamlin added, “Some of the issue we have is we have single source suppliers. They can somewhat dictate what the price is. There’s a certain cost of the Next Gen car that they can automatically raise and not even have to get the O.K. Labor, inflation, they can raise the price and not even have to say anything.”
“One manufacturer makes a bid for the control arms, they win the bid. So we all have to purchase from company A. That price can float and it never floats down.”
“Look at Hendrick Motorsports, Joe Gibbs Racing, Stewart-Haas, they could build this Next Gen car. We could build the Next Gen car, in house.”
“This is just my opinion. You could let Joe Gibbs Racing build the clips. Hendrick Motorsports builds all the deck-lids, hoods. NASCAR techs these cars so vigorously, it’s not like they could give themselves a better deck-lid.”
“I mean, they could. That’s the only negative part.”
“The cost of the car is so high, I’d be willing to take that risk. And, I believe that the teams quality control would be better than any of the other manufactures.”
“It could save us a tremendous amount of money. The teams could build this Next Gen car much much cheaper than what it costs us currently to purchase it from someone else.”
“We could probably build this car for half of what we’re paying for it right now. You have to make sure that the builder does not get the best of everything.”
Another Solution? New business model on the way
Also on the table is a new business model for the sport. NASCAR is currently in negotiations with the RTA alongside a search for a new tv deal.
Teams currently receive 25% of the tv revenue. With a new deal on the way for 2025, teams are calling for a much larger portion of that pie.
“The need for a new business model is so important for us. This Next Gen car is not saving us the money that we thought that it would back when the team owners voted on a Next Gen car.”
“What we want as team owners is for our costs to compete to be covered by the league. There’s not a league where the cost to compete is not covered, except for in NASCAR.”