Eight of the ten teams arrived in Melbourne with entirely new 2005 chassis. Ferrari and Minardi both opted to begin the season with modified 2004 machinery adapted to comply with the new technical regulations. Minardi had initially pursued legal action against the FIA after the governing body refused to allow the team to run their cars in original 2004 specification; they eventually dropped the case and modified the PS04B chassis in time to participate.
The new-for-2005 two-race engine rule required drivers to use the same engine across two consecutive race weekends, with a ten-place grid penalty imposed for any unscheduled change. This regulation would have significant consequences during the weekend.
Qualifying took place on a damp track in conditions that caught several teams off guard. A storm was forecast within 20 minutes of the session's start. Christijan Albers set the initial benchmark for Minardi on the wet surface, with the session running in reverse championship order from the 2004 Brazilian Grand Prix. Jenson Button initially went fastest before Williams drivers Nick Heidfeld and Mark Webber improved. Toyota's Jarno Trulli then took provisional pole with a 1:35.270 before Giancarlo Fisichella produced a 1:33.171 to claim the top time ahead of the rain.
Torrential rain arrived as the session progressed. Michael Schumacher switched to wet Bridgestones and could only manage 1:57.931, leaving him 18th. Both he and Takuma Sato received additional ten-place grid penalties for engine changes. Fernando Alonso qualified 14th and Barrichello 12th. Both McLarens of Montoya and Räikkönen qualified tenth and eleventh.
Kimi Räikkönen's McLaren stalled during the formation lap, resulting in the race being started over and Räikkönen starting from the pit lane for the shortened 57-lap event. Fisichella and Trulli pulled clear at the front while Barrichello and Alonso each gained three places on the opening lap, showing more of their cars' genuine pace than the wet qualifying had revealed.
As the race progressed, Trulli's Toyota was hampered by a blistered rear tyre and dropped steadily through the field. Ralf Schumacher, also in a Toyota, made two early pit stops to tighten a loose safety harness. The key incident of the mid-race came when Michael Schumacher emerged from the pit lane just ahead of Nick Heidfeld's Williams at the third corner. Schumacher closed the door on Heidfeld, who had no traction on the grass and slid into the side of the F2004M, beaching both cars in the gravel. Heidfeld retired on the spot while Schumacher later retired in the pits from collision damage.
Fisichella retained the lead through his pit stops, relinquishing it only briefly while refuelling. Barrichello moved from eighth to fourth in the first round of pit stops and climbed further as others struggled. In the closing stages, Alonso pressed Barrichello hard but the Brazilian held second despite a brake balance problem. Fisichella managed the gap expertly throughout and crossed the line to claim his second career victory, his first having come with Jordan in 2003. Alonso set the fastest lap of the race and was noticeably the fastest car on track for most of the afternoon.
In a notable use of a regulatory loophole, both BAR cars pitted on the final lap without genuine mechanical problems. By not officially finishing the race, they effectively exempted themselves from the two-race engine rule, allowing their Honda engines to be replaced before the Malaysian Grand Prix without incurring a penalty. The FIA closed the loophole immediately, requiring a genuine technical problem to qualify for a replacement engine.
The result gave Renault an encouraging season opener, with Fisichella leading the Drivers' Championship. Alonso's third place underlined the team's pace. Red Bull Racing scored no points on their debut weekend, though Vitantonio Liuzzi had shown speed in Friday practice before spinning into the gravel at turn three.
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