Red Bull and Honda have finalised a deal for the Formula 1 team to continue using the Japanese manufacturer’s power unit from the 2022 season.

Red Bull has devised a new company named Red Bull Powertrains Limited to oversee the project, which will be operated from Red Bull Racing’s F1 team base in Milton Keynes.

Honda’s decision to quit F1 at the end of the year left Red Bull and sister team AlphaTauri without a power unit for 2022 onwards, and the Milton Keynes squad quickly outlined that its preferred course of action would be to take over Honda’s intellectual property as part of a continuation project.

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With Red Bull making it clear it did not have the resources to fund in-house engine development of Honda’s power unit, the team began a push for an engine freeze from next year. After a number of delays, the freeze was unanimously agreed by teams last week.

That enabled Red Bull to conclude talks with Honda over a deal to continue using its power unit technology, with an announcement on Monday morning confirming an agreement had been reached.

The deal struck will see Red Bull and AlphaTauri’s cars continue to be powered by Honda engines until the next generation of power units are introduced in 2025.

Red Bull team principal Christian Horner described the move as a “significant step” for the team on its F1 journey.

“We were understandably disappointed when Honda made the decision to leave the sport as an engine manufacturer, as our relationship yielded immediate success, but we are grateful for their support in facilitating this new agreement,” he said.

“Honda has invested significantly in hybrid technology to ensure the supply of competitive power units to both teams. We now begin the work of bringing the power unit division in-house and integrating the new facilities and personnel into our Technology Campus.

“In the meantime, we are fully focused on achieving the best possible results in what will be Honda’s final season as an official power unit supplier.”

Red Bull motorsport advisor Helmut Marko, who insisted such a move was the team’s only option, was pleased the approved engine freeze opened the door for a deal with Honda to be reached.

“We have been discussing this topic with Honda for some time and following the FIA’s decision to freeze power unit development from 2022, we could at last reach an agreement regarding the continued use of Honda’s hybrid power units,” added Marko.

“We are grateful for Honda’s collaboration in this regard and for helping to ensure that both Red Bull Racing and Scuderia AlphaTauri continue to have competitive power units.

“The establishment of Red Bull Powertrains Limited is a bold move by Red Bull but it is one we have made after careful and detailed consideration. We are aware of the huge commitment required but we believe the creation of this new company is the most competitive option for both teams.”