Lola Cars International, based in Huntingdon, England, had a long history of supplying chassis to other Formula One teams, including Larrousse and Scuderia Italia, before team principal and founder Eric Broadley decided to enter a full works effort. A prototype chassis was first tested in late 1994 and early 1995 with Allan McNish at the wheel. By late 1996, Broadley had formally announced the team's participation in Formula One.
The original plan had been to enter in 1998, when a new set of technical regulations was due to overhaul car design. However, commercial pressure from title sponsor MasterCard — which was keen to launch an "F1 Club" for its card holders — pushed the entry forward by a year. The car was launched at the Hilton Hotel in London on 20 February 1997. At that event, Broadley stated an ambition to win the World Championship within four years.
The Lola T97/30 was designed by Eric Broadley and Chris Saunders, drawing heavily on the company's expertise in CART machinery. Crucially, however, the car never passed through a wind tunnel before reaching the circuit, and testing was minimal. This was primarily because the team's engine programme fell behind schedule.
The original intent had been to use an in-house Lola V10 engine designed by Al Melling, which was to integrate with the car's rear bodywork and diffuser package. When the Lola engine failed to be completed in time, the team was forced to use the Ford-Cosworth ECA Zetec-R V8 — an outdated unit that had previously been used by the defunct Forti team in 1996 and by Sauber in 1995. The combination of an aerodynamically untested chassis and an underpowered, ageing engine left the car hopelessly uncompetitive before it turned a single competitive lap.
Vincenzo Sospiri, an International Formula 3000 champion who had previously served as a test driver for Benetton, and Ricardo Rosset were signed as the team's drivers. When the cars arrived at the 1997 Australian Grand Prix in Melbourne, the scale of the problem became immediately apparent. Under the championship's rules, a driver was required to set a qualifying time within 107% of pole position to be allowed to start the race. Sospiri and Rosset were approximately 11 and 13 seconds respectively slower than the pole time — nowhere near the cutoff. Neither qualified.
On 26 March 1997, the Wednesday before the Brazilian Grand Prix, Lola announced it was withdrawing from the race citing "financial and technical problems." Staff who had already travelled to Interlagos returned to Huntingdon. Shortly afterwards, the team withdrew from the World Championship altogether.
Testing at Silverstone following the Australian debacle had also proved fruitless, with the cars again bottom of the timesheets by a large margin. In its brief existence as a Formula One constructor, Lola had accumulated approximately £6 million in debt. The company entered receivership several weeks later. Irish entrepreneur Martin Birrane subsequently purchased Lola and helped revive its broader business, though the marque did not return to Formula One in any capacity.
Rosset went on to race for Tyrrell in 1998. Sospiri never competed in a Formula One race again.
In April 2009, Lola Cars announced an intention to return to Formula One as a full works constructor for the 2010 season, citing the proposed introduction of a budget cap as an opportunity. However, in June 2009, the plan was abandoned after Lola failed to secure a place on the initial 2010 entry list.
The 1997 MasterCard Lola episode is widely cited as one of the most prominent cautionary tales in Formula One history. In a 2021 interview, driver Vincenzo Sospiri reflected on having been caught unawares by the team's sudden withdrawal from the Brazilian Grand Prix and the remainder of the season. That same year, Motorsport Week ranked MasterCard Lola third on its list of Formula One's ten worst teams. The episode is regularly invoked in discussions of the risks facing underprepared or underfunded entrants to the sport, and the team remains, as of 2026, the constructor with the fewest competitive appearances in the championship's history.