At the end of 1998, both the FIA GT Championship and United States Road Racing Championship eliminated the GT1 category that the Esperante GTR-1 had competed in since its introduction in 1997. This left the Esperante GTR-1s with nowhere to compete unless they were modified into a Le Mans Prototype, similar to what was done with some Porsche 911 GT1s. However Panoz decided that an all-new car would be more competitive against the newcoming Audi and BMW prototypes in the American Le Mans Series, a new championship founded by Panoz.