Budget cap threatens to be higher than planned: '155 million in 2023'

The budget cap, introduced in 2021, was supposed to fall from $145 million to eventually $135 million in the coming years, according to the original plan. Instead, due to high inflation and additional surcharges, the cost cap risks peaking in 2023 at over $150 million.

Formula 1 has been busy with the budget cap for several weeks because of Red Bull Racing's breach in the previous season. Max Verstappen's team overspent and must now pay a fine and surrender wind tunnel time over the next 12 months. This year, the cap would originally drop to $140 million, where it would only be $135 million in 2023, reports Auto, Motor und Sport. Top teams Ferrari, Red Bull and Mercedes are said to have made every effort to get more exceptions. Now the driver's salary does not count in the cost, as do the three most expensive employees, travel expenses, etc.

There are a number of aspects that increase the budget cap this year and in 2023 anyway. "Additional races, the introduction of sprint races and the inflation surcharge have increased the base amount. The original budget limits are long gone", reports the German medium. For example, there is a limit of 21 races. Each Grand Prix above that limit adds another $1.2 million to the budget cap, including races that are cancelled. So next year, because of the record number of races on the calendar, teams will get a hefty bonus on top.

Big bonus for sprint races

This year, there was also an extraordinary inflation bonus. This added another $4.6 million. Teams also demanded more budget because of the sprint races, as the extra session causes wear and tear on parts and a higher chance of accidents. "Therefore, a fixed amount of $150,000 was added to each sprint. If there was actually a major accident, as happened last year at Monza with Pierre Gasly, the team had to prove that the cost of the accident exceeded the $150,000. This was then added to the budget." So in 2021 and 2022, the budget cap increased by another $450,000 because of the three sprint races. Next year, that would become $900,000 because of the six sprint races, but that number is still being negotiated, according to AMuS. "The FIA no longer wants to assess accident damages individually. It could come down to the teams, the FIA and F1 management negotiating an amount higher than the $900,000."

Amount for 2023 above 150 million

So the exceptions and surcharges will only raise the cost cap in 2023. "Next year, inflation will drive the budget cap even higher. For 2023, the March inflation rate will be taken. At the current rate of 7.9 per cent, that would be a huge increase of $10.6 million." Thus, if the budget cap were currently calculated for next year, you would arrive at a figure of almost $155 million, compared to the $135 million once targeted. This season, the cost cap would be around $146 million instead of the predicted $140 million.