Honda said Friday it will withdraw from Formula One at the end of the 2021 season as part of the car industry's move away from internal combustion engines.

The Red Bull and Alpha Tauri teams use power units made by the Japanese manufacturer.

Honda's decision to quit Formula One leaves Red Bull looking for a new engine supplier
Honda's decision to quit Formula One leaves Red Bull looking for a new engine supplier POOL / Pavel Golovkin

Honda said its industry was undergoing a "once-in-one-hundred-years period of great transformation" and it was pursuing "carbon neutrality by 2050" using "future power-unit and energy technologies, including fuel-cell vehicle and battery technologies".

"To fulfill the expectations of its fans, Honda will work together with Red Bull Racing and Scuderia AlphaTauri to continue competing with its utmost effort and strive for more victories all the way to the end of the 2021 season," said the Honda statement.

Red Bull Team Principal Christian Horner said Honda's decision presented "obvious challenges" to the team
Red Bull Team Principal Christian Horner said Honda's decision presented "obvious challenges" to the team POOL / Mark Thompson

Red Bull Team Principal Christian Horner said: "The shifting focus within the automotive industry has led to Honda's decision to re-deploy their resources and we understand and respect the reasoning behind this.

"Their decision presents obvious challenges for us as a team but we have been here before and with our strength in depth we are well prepared and equipped to respond effectively, as we have proven in the past."

The decision leaves Red Bull looking for a new engine supplier, a situation it will need to resolve quickly to prevent its in-demand Dutch driver Max Verstappen seeking a new challenge at another team.

Rivals Ayrton Senna and Alain Prost were both driving Honda-powered McLaren's when they battled at Monte Carlo in 1988
Rivals Ayrton Senna and Alain Prost were both driving Honda-powered McLaren's when they battled at Monte Carlo in 1988 AFP / -

Honda's glory years in Formula One came in the 1980s with McLaren and the defining rivalry of that era time between Alain Prost and Ayrton Senna, who each spent five years at the team.

Its move into team ownership between 2006 and 2008 ended largely in failure as it recorded a single victory, with Jenson Button at the wheel at the 2006 Hungarian Grand Prix.

Honda later left the sport, returning in 2015 but struggled for three years working with McLaren.

The company transferred its attention to Red Bull's junior team Toro Rosso for 2018 and then Red Bull for 2019, and have won a total of five races over the last two years.

But they have been unable to sustain a challenge to Mercedes who have increased their stranglehold on the sport this season.

Honda's decision leaves Formula One reliant on three engine companies -- Renault, Mercedes and Ferrari.

The Japanese giant's commitment to new technology also underlines the dilemma faced by the sport as it seeks to deal with the challenge of the evolution of the wider auto industry towards greener solutions.