New Twist to $140 Million Budget Cap Struggle That's Dividing F1 Teams

Formula 1 teams are at loggerheads over the budget cap.

The bigger teams are in favor of a raise to the current $140 million cap because of inflation, which has driven up energy costs, as well as due to logistical costs, which are higher because of increased demand and longer travel routes following Russia’s invasion of Ukraine.

Ferrari team boss Mattia Binotto said there is “no way for us to stay below” the limit, while Red Bull counterpart Christian Horner outlined that “certainly all the major teams are going to breach that $140 million count this year. When we sat down and agreed those figures, nobody could have even contemplated world events that are driving inflation. We don't even know what that inflation is going to be in the second half of the year. We're all seeing the cost of living rising, we're seeing utility bills going through the roof. Where is that going to go in the next six months?”

They are keen to come up with a common sense solution for Formula 1, citing the risk to the show, and the probability of making further redundancies. But some other teams already have that common sense solution.

“If we have some increase on energy or freight (costs), the best solution is to switch off the wind tunnel to stop bringing updates every single weekend,” said Alfa Romeo boss Frederic Vasseur. “We are in this situation and sooner or later we will have to stop the development of the car because we will be at the limit of our budget. And I think everybody can do the same.”

Not everyone is crying about their current plight.

Alpine team principal Otmar Szafnauer said that “most teams do their budgets in November, December timeframe, for the following year and we are no different. And at that time, inflation was already at 7%. Retail Price Index in England was 7.1%, 7.2%. We took that into consideration when we did our budgets and laid out all the development work that we were going to do.

“And we're still within it, even though freight was a little bit more expensive than we thought, we're still under the cap. And we plan to be there at the end of the year. And we'll adjust the development accordingly. Where there's a will there's a way and we set a budget cap and we should stick to it.”

This one is set to rumble on with further arguments behind the scenes.