Vom Verlustbringer zum 9-Mrd-Team: Mercedes-Macher Toto Wolff & Ola Källenius (#955)

How Mercedes turned a cost centre into a 9bn franchise

Mercedes-Benz let an outsider run its Formula 1 team, and the bet turned a cost centre into one of the most valuable franchises in sport. Wolff's pitch to a sceptical board was a plan rather than a dream, and the team now earns close to 200m euros a year. The edge is entrepreneurial freedom, data weighed against human judgement, and a culture that keeps and rehires engineers, which is also how both men read a car industry trading at a fraction of Tesla's multiple.

Takeaways

• Mercedes F1 team went from 100m to 9bn. Wolff bought into the team around 2013, when it was worth about 100m euros, and now puts it at 8 to 9bn dollars. It makes close to 200m euros in profit.
• Board heard a dream, Wolff had a plan. Källenius says Wolff told the board it was sitting on a sports franchise like the Dallas Cowboys. The board heard a dream, but it was a plan, and the plan worked.
• Data and AI still lose to human judgement. Wolff sits between the data and AI calculations and the human view. Källenius says their race-day advice has been right less often than the strategy team's. Wolff has overruled the team two or three times in recent years.
• Mercedes bet on an 18-year-old after Hamilton left. Ferrari passed on Kimi Antonelli, whom Mercedes contracted at eleven and put in the car at 18 after Lewis Hamilton left. Källenius calls a career a relay race where passing the baton matters as much as your own task.
• Wolff lets leavers go, then welcomes them back. Wolff will not hold back anyone leaving for family reasons or a much bigger offer. About 80 percent of senior leavers want to return, and one engineer who left for triple salary came back on a pay cut.
• Car industry trades at a fraction of Tesla. Tesla trades at a price-earnings multiple of about 300 and Mercedes at about 8. Källenius points to a Chinese market down 20 percent and to Trump's tariffs. Mercedes holds 30bn euros of net liquidity.

How Toto Wolff got to Mercedes

1. He met Källenius about 20 years ago through Hans Werner Aufrecht, the founder of AMG, at a DTM race.
2. Wolff was a would-be racing driver without money. He moved into venture capital and GT racing at 27 or 28, taking a stake in a team and in HWA.
3. He became a non-executive director at Williams, and when its CEO resigned Frank Williams put him in charge of leading the team.
4. Mercedes wanted an entrepreneur with skin in the game. He took the roles of motorsport boss, CEO and team principal to avoid friction between Stuttgart and the team.