- The cost cap in Formula 1 hinders smaller teams from closing the gap
- The cost cap, implemented in 2021, sets a maximum budget for teams
- Larger teams quickly agreed to the cost cap
James Vowles, a former chief of Mercedes, believes that the cost cap in Formula 1 hinders smaller teams from closing the gap with top constructors like Red Bull.
The cost cap, implemented in 2021, sets a maximum budget for teams to promote competitiveness in the sport.
While Vowles supports the idea in principle, he points out that teams at the bottom of the grid still struggle to keep up due to the resources and equipment accumulated by their competitors over the years.
He explains that there are two aspects to the cost cap: the operational budget cap, which is widely known and set at $145 million, and the capital expenditure cap.
Vowles reveals that teams like Mercedes possess around $300 million worth of equipment that others, such as Williams, do not have access to.
James Vowles. Photo/Planet F1
“There’s the operational budget cap, which is the number that most people know. That’s the $145m – which is not really $145m, it’s larger than that because there’s various corrections applied to it – that’s the number everyone thinks of the cost cap,” he told RaceFans.
He cites that this disparity is hard to overcome, and even if it were possible, the time and effort required to amass $300 million and effectively utilize it is very huge.
Consequently, larger teams quickly agreed to the cost cap, as it solidified their advantage.
Vowles emphasizes that this puts smaller teams at a significant disadvantage, akin to fighting with one arm tied behind their back.
“What wasn’t a good decision is we have a capital expenditure side of the cost cap. When I had my Mercedes hat on, unfortunately I knew what this would do which is why we were so keen on signing it up and restricting this,” he added.
Red Bull was found guilty of breaching the cost cap and faced a fine of £5.5 million ($7 million).
The original budget has since been reduced, and teams are now restricted to a spending limit of £119.5 million ($138.6 million) for the 2023 season.
Red Bull and Aston Martin reportedly went above the $145 million (£114 million) cap set by Formula 1’s governing body FIA last season.
Max Verstappen. Photo/PlanetF1
Speaking to BBC, Horner said these reports are just guesswork. On the other hand, Aston Martin, stated they were “awaiting certification and in discussion with the FIA.”
The FIA is currently finishing up its evaluation of the financial information for 2021 that all F1 teams have provided. Alleged financial regulation violations, if any, shall be handled in accordance with the formal procedure outlined in the regulations.
According to the cost-cap standards, an overspend of less than 5% is “small,” and one of more than 5% is “substantial.”
A minor violation may result in penalties such as a decrease in the team’s cost ceiling. Alternatively, a decision of points for the championship in which the violation occurred or a suspension from a select few competitions, restrictions on research and development.
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