Volkswagen Group director Bernhard Gobmeier says Formula 1 is on a "dangerous path" over the rising costs to run a team.
F1 chiefs Chase Carey and Ross Brawn have insisted that they want to see a fairer spread of income among teams once the current Concorde Agreement expires in 2020.
Teams like Force India have urged F1 owners Liberty to focus on reducing costs quickly, and Gobmeier reckons the smaller teams are "walking a very dangerous path".
Two of Volkswagen's brands - Porsche and Audi - have recently committed to Formula E.
"Formula 1 is on a dangerous path. It is expensive. Most of the teams, apart from the big four, have financial problems. And tracks cannot pay what they are asking for," Gobmeier told Motorsport.com during his recent visit to India.
"Due to its expensive nature, they are walking a very dangerous path in my personal opinion. We see it everywhere."
He added: "Mercedes has over 1,500 people working on the F1 project. That is not even considering the suppliers, though it is not so much.
"It is probably 2,000 people on two cars. You should consider how expensive wages are in England and how expensive material is."
Gobmeier reckons Americans have been doing a better job than Europe at controlling costs in sports.
"In America, they have cost control on their minds. They manage it well," he noted. "In Europe, there are a lot of different categories. In some of them, cost control is really good. But, F1 is completely out of range and so is the WEC."
He thinks that F1 needs to offer a better show if it is to attract big sponsors again.
"The number of sponsors is going down. The big sponsors, like the cigarette companies, are not there anymore. The small sponsors are also reducing," he said.
"The number of sponsors is going down and so are the spectator numbers. At the same time, the cost is increasing. Something is not fitting there. They have to make the races more spectacular."
MotoGP "100 times better"
The former Ducati MotoGP boss said that as a show, MotoGP is far better than F1.
"MotoGP is above F1 from the show point of view. It is 100 times better. There is no comparison. MotoGP, its supporting races and World Superbikes are way better than F1," Gobmeier said.
"Theoretically, MotoGP has the potential to commercially capitalise on its popularity. And they do. We have Ducati in our group and we can see what difference in sponsorship can be achieved.
"Ducati is achieving the biggest sponsorship. Even Porsche, Bentley, Audi do not achieve such big sponsorship. Ducati is special and comparable to Ferrari and the sponsors get real value.
"They do good activation at the races, both in terms of media, hospitality, programmes and other things. The car companies are not so good in that."