TOKYO -- Honda Motor is ending its participation in the FIA Formula One World Championship after the 2021 season, the company announced on Friday.
Honda cited its focus on efforts to achieve carbon neutrality by 2050 as the reason, through technologies such as electric and fuel-cell vehicles.
"Honda needs to funnel its corporate resources in research and development into the areas of future power unit and energy technologies," the Japanese carmaker said in a statement.
Honda returned to F1 racing in 2015, its fourth foray into the sport providing power units including engines to the McLaren team.
Through the end of the 2021 F1 season, it will be working with the Red Bull Racing and Scuderia AlphaTauri teams.
Honda reported a net loss of 80.8 billion yen ($770 million) in the April-June quarter, as the economic effects of the coronavirus pandemic took hold.
"Although many inside the company believed we should continue to race, we decided that we should use the resources of our engineers on the environment," President and CEO Takahiro Hachigo said in an online news conference.
The auto industry faces headwinds due in part to stronger emissions rules being introduced around the world. The U.K. and France plan to ban sales of new vehicles with internal combustion engines, such as those that run on gasoline or diesel, by 2035 and 2040, respectively. The U.S. state of California will require that all new cars sold be zero-emission vehicles by 2035, according to a plan announced by Gov. Gavin Newsom in September.
Honda aims to have electrified vehicles such as hybrids account for two-thirds of its global sales by about 2030. When it announced its exit from F1 racing on Friday, it also unveiled a new target to achieve carbon neutrality -- having a net zero carbon footprint -- in 2050.
In electric vehicles, Honda has fallen behind major overseas players such as Tesla, which holds a roughly 20% market share. It hopes to make strides in this field through such steps as its strategic partnership with General Motors announced in September, but it remains to be seen whether it can make full use of the resources freed from its withdrawal from F1.
The company's founder, the late Soichiro Honda, first announced plans to participate in F1 racing in 1962. The automaker took part from 1964 to 1968, from 1983 to 1992, and from 2000 to 2008 before its current fourth foray.
Technologies acquired through the development of the HondaJet business jet have been applied to F1 operations. Current F1 rules require that the cars run on hybrid power units that also use electricity. Honda tapped its jet technologies to develop a key component of the power units that convert heat emitted from the engine into electricity. These units are known for offering among the fastest speeds in F1 while being fuel-efficient.