INDIANAPOLIS — Josef Newgarden has informed Ed Carpenter he will not return to the IndyCar team next season.

Ed Carpenter Racing announced Newgarden’s decision on Thursday. The American driver is thought to be highly coveted by Team Penske, which has been in limbo over the status of former Indianapolis 500 winner Juan Pablo Montoya. It could lead to a seat swap, with Newgarden going to Penske and Montoya moving to ECR.

ECR said only that it is evaluating all options for next season’s driver lineup.

“While it’s disappointing that Josef will not be returning, it’s also not a total surprise after all of the speculation the past few weeks,” Carpenter said. “I wish Josef the best in his future endeavors, but also remain focused on ECR’s continued success. We are positioned well moving into 2017 and I have total confidence that we will continue to deliver the high level of performance we expect as a team.”

Carpenter will continue to drive for his team on ovals.

Newgarden won three races driving for Carpenter and finished a career-best fourth in the standings behind three Penske drivers.