Lauda was born on 22 February 1949 in Vienna, Austria, to a wealthy paper manufacturing family. His paternal grandfather was the Viennese-born industrialist Hans Lauda. Lauda became a racing driver despite his family's disapproval. After starting out with a Mini, Lauda moved on into formula vee, as was normal in Central Europe, but rapidly moved up to drive in private Porsche and Chevron sports cars. With his career stalled, he took out a £30,000 bank loan, secured by a life insurance policy, to buy his way into the fledgling March team as a Formula Two driver in 1971.
Lauda was quickly promoted to the Formula One team, but drove for March in Formula One and Formula Two in 1972. Although the latter cars were good and Lauda's driving skills impressed March principal robin herd, March's 1972 Formula One season was catastrophic. Lauda took out another bank loan to buy his way into the brm team in 1973. Lauda was instantly quick, but the team was in decline; although the brm p160e was fast and easy to drive it was not reliable and its engine lacked power. Lauda's popularity was on the rise after he was running third at the Monaco Grand Prix that year before a gearbox failure ended his race prematurely, resulting in enzo ferrari becoming interested.
Lauda took his maiden podium in his debut for ferrari, and his maiden victory three races later at the spanish grand prix. After winning five Grands Prix in his 1975 campaign, Lauda won his first title, becoming the first ferrari-powered World Drivers' Champion in 11 years. Lauda dominated the start of the 1976 Formula One season, winning four of the first six races and finishing second in the other two. By the time of his fifth win of the year at the british grand prix, he had more than doubled the points of his closest challengers jody scheckter and james hunt.
On 1 August 1976, during the second lap at the very fast left kink before Bergwerk, Lauda was involved in an accident where his ferrari 312t2 swerved off the track, hit an embankment, burst into flames, and made contact with brett lunger's surtees-ford car. Lauda suffered severe burns to his head and hands and inhaled hot toxic gases that damaged his lungs and blood. He chose to limit reconstructive surgery to replacing the eyelids and restoring their functionality. After the accident he always wore a cap to cover the scars on his head.
Lauda returned to racing six weeks later at the italian grand prix, eventually losing the title to hunt by one point. Lauda remained at ferrari in 1977, winning several races on the way to his second championship and clinching the title at the united states grand prix. He eventually left ferrari, where he was replaced by gilles villeneuve, and signed with brabham in 1978. Lauda returned to Formula One in 1982 with mclaren, winning multiple races. After a winless 1983 campaign, Lauda was partnered by alain prost the following season, where he beat prost to his third title by a record half-point.
Lauda was inducted into the international motorsports hall of fame in 1993. He returned to Formula One in an advisory role at ferrari in 1993, and was the team principal of jaguar from 2001 to 2002. From 2012 until his death, Lauda was the non-executive chairman and co-owner of mercedes, winning six consecutive World Constructors' Championships with the team from 2014 to 2019.