This latest contractual saga follows a protracted legal battle over his services for 2023, when Ganassi filed a lawsuit against its own driver after he signed a contract with McLaren in the summer of 2022.
A legal mediation led to him staying with Ganassi for this season, in which he seems certain to claim his second championship, but allowed him to drive McLaren Formula 1 cars and serve as the team's reserve F1 driver.
He seemed set to join the Arrow McLaren IndyCar squad for 2024 until now.
In a statement, McLaren Racing's chief executive Zak Brown said: “I’m extremely disappointed that Alex Palou does not intend to honour his contractual obligations to race with us in IndyCar in 2024 and beyond.”
In a letter sent to McLaren employees after final practice at Indianapolis on Friday evening, first reported by the Associated Press, Brown wrote: “This is incredibly disappointing, considering the commitment he has made to us both directly and publicly and our significant investment in him based on that commitment.”
He also pointed out the “time, money and resources preparing to welcome Alex into our team because we believed in him and were looking forward to IndyCar wins with him”.
Palou had been an integral part of McLaren’s F1 TPC (testing of previous cars) program, driving most recently at the Hungaroring in June – alongside regular race driver Oscar Piastri – after previous tests at the Red Bull Ring and Barcelona.
He also drove in Free Practice 1 at last year’s United States Grand Prix and was present at May’s Miami Grand Prix as McLaren’s reserve driver.
The saga took another twist on Saturday as it was revealed that Palou has split with his management company, Monaco Increase Management, which issued its own statement saying it was “bitterly disappointed” with his decision.
It read: “Monaco Increase Management is bitterly disappointed to learn about Alex Palou’s decision to break an existing agreement with McLaren for 2024 and beyond.
"Together, we had built a relationship that we thought went beyond any contractual obligation and culminated in winning the 2021 IndyCar crown and tracing a path to F1 opportunities.
“Life goes on and we wish Alex all the best for his future achievements.”
MIM had been active in the F1 paddock representing Palou, as his McLaren deal is understood to have had a multi-million pound buyout deal until 1 July, but he confirmed this week that he’d had no interest from other F1 teams.
All signs now point to a multi-year renewal with Ganassi, with a seven-figure salary that would likely make him the best-paid driver in the series.
