Students build a single seated formula style car with which they can compete against teams from all over the world. The international design competition is not won solely by the team with the fastest car, but rather by the team with the best overall package of construction, performance, and financial and sales planning.

Formula Student challenges the team members to go the extra step in their education by incorporating into it intensive experience in building and manufacturing as well as considering the economic aspects of the automotive industry. Teams take on the assumption that they are a manufacturer developing a prototype to be evaluated for production. The car must show very good driving characteristics such as acceleration, braking and handling. It should be offered at a very reasonable cost and be reliable and dependable. Additionally, the car's market value increases through other factors such as aesthetics, comfort and the use of readily available, standard purchase components. 

The challenge the teams face is to compose a complete package consisting of a well constructed single seated formula style car and a sales plan that best matches these given criteria. The decision is made by a jury of experts from the motorsport, automotive and supplier industries. The jury will judge every team's car and sales plan based on construction, cost planning and sales presentation. The rest of the judging will be done out on the track, where the students demonstrate in a number of performance tests how well their self-built cars fare in their true environment.