In the United States, SAE Inc (Society of Automotive Engineers) started running their Formula SAE programme in 1981. In their opinion, newly graduated engineers lacked some vital practical engineering skills. Therefore, they decided to start a competition which required students to improve on these missing skills. In 1998 two cars from the US and two cars from the UK competed in a demonstration UK Event that was held at the MIRA Proving Ground. The initiative was considered to be very worthwhile in providing students with excellent learning opportunities and practical skills. The IMechE accepted the management of the European venture in a partnership with SAE.

Formula Student is different from Formula SAE in that it is designed to be a progressive learning exercise throughout a three or four year academic course. However, the same rules are used for both Formula Student and Formula SAE (with some minor changes) and this means student teams can enter their cars in the Formula SAE in the US, Formula Student and Formula SAE in Australia.