Formula 1 to Increase Budget Cap

The F1 commission has proposed and agreed to some changes after they held a meeting yesterday. The highlight from meeting was the decision about teams budget.

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Formula 1 to Increase Budget Cap

From the 2021 season, F1 settled an initial budget cap for the year of $145 million per team that was adjusted depending on the number of races. The vision of this was to reduce the gap among all the teams. This was set to be $140 million for this year.

Due to the worsening economic situation around the world, high levels of inflation and growing freight costs. A number of teams pushed for increase to the budget cap, while some other teams protested against it too.

Following the latest meeting of the F1 Commission in Austria, it was confirmed to be approved that budget cap will increase by 3.1% for this season.

The decision had support from F1, FIA, and 9 of the 10 teams, and sees the original indexation planned for 2023 brought forward to come into effect for 2022.

A statement from F1 and the FIA said the high inflation rates since the end of last year caused “a risk of noncompliance with the financial regulations if actions are not taken”, warranting intervention.

“Following consultation with the Financial Advisory Committee over recent weeks, the FIA brought a proposals to the Commission that was approved by the required majority with support from the FIA, Formula 1 and nine of the teams,” the statement says.

"The proposal recognizes the unexpected increase of costs incurred by teams in 2022 thereby permitting indexation at a limited rate of 3.1% (which takes into account the original 3% inflation threshold already set out in the regulations) and permitting compounding of this rate as from 2023.

Big teams like Ferrari warned at the end of May they would never stay within the budget cap for this year due to increasing costs, while Red Bull F1 chief Christian Horner warned it would be catastrophic adding some teams will have to abandon races in season end.

Some of the smaller teams were more reluctant to agree to a change in the regulations, with Alfa Romeo boss Frederic Vasseur suggesting the bigger outfits simply develop their cars less to stay within the limit.

There were some more regulation changes approved in the meeting too. We will see them get applied from 2023 season and onwards.

Pre-Season testing in 2023: The Commission decided to update regulations, allowing pre-season testing to take place outside of Europe 4 days prior to the 1st event of the season.

TD-39 “Vertical Oscillations” or “bouncing” as well as restrictions to floor flexibility will be delayed from the FrenchGP to BelgianGP

FIA had originally intended to introduce an Aerodynamic Oscillation Metric (AOM) which teams could not exceed for the next race at Paul Ricard.

Part of its plan, which was to reduce car bouncing and therefore improve driver safety, also controversially included moves to limit certain tricks teams were believed to be doing with flexi-floors.

Statement from the FIA said: “Following feedback and consultation with the teams and in order to allow the teams to make necessary updates to the plank and skid assemblies, which will ensure a fair application of the metric used to measure this oscillation across all cars, the implementation of the draft Technical Directive issued to the teams prior to the British Grand Prix will come into effect from the Belgian Grand Prix.”

The FIA statement added that the monitoring of car that began at the Canadian Grand Prix would continue.

The F1 Commission also discussed the tighter limits for curfews on personnel working in the paddock that were introduced this year as part of the revised race weekend format.

The statement says “To a large extent this has been a success, and after the first half of the season a number of areas for improvement have been identified, specially in relation to the parc ferme timings after qualifying,”

This means that current an hour and half window for parc ferme after qualifying on a Saturday to be reduced to only half hour from next year, easing post-session pressures on teams and the FIA officials conducting technical checks.

The 2026 Power Unit was discussed by the commission and it was confirmed that the package of regulations is close to finalizing.

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