How Are Financial Engineers Helping Mercedes Manage The Cost Cap? Toto Wolff Sheds Light!

The FIA introduced the cost cap last season to limit the amount of money teams spend on the development of their cars throughout the season. The financial limitation was introduced to allow smaller teams to spend an equal amount of money as some of the bigger outfits and keep themselves in contention. The introduced $145m limit was further reduced by $5m in 2022. However, teams raised some concerns after the inflations led to an increase in freight and utility costs.

The FIA and the teams came to a mutual decision to increase the cost cap by 3.1%. The sport\’s governing body is quite strict about the budget cap. And any team who overspends would be held accountable and penalized. Recently, Mercedes boss Toto Wolff talked about the measures his team took to keep a close eye on the finances and actively bring upgrades to the car without breaching the cost cap.

Wolff Discusses Mercedes\’ Approach To Cost Cap

Mercedes have had a tough season so far. The Silver Arrows could not get new ground-effect aerodynamics right. As a result, they struggled to deal with porpoising for the most part of the season\’s first half. The German outfit was busy solving the issue and had no scope of bringing any kind of performance upgrades. However, the team is slowly getting back at the front. Not just that, Wolff claimed that Mercedes would be bringing a series of upgrades during the second half of the season. The Mercedes team principal disclosed that his team has been using financial engineers to keep track of their spending and account for all the upgrades this season. 

The former Austrian driver said Mercedes was using trackers monitored by financial engineers. They also track every single process and account for every part of the car. The engineer takes notes of all the parents coming out of the truck. Then the value is added to the expenditure when the part is utilized and counted for. Mercedes have been following the same trend as planned. Toto also revealed that Mercedes may not have brought too many upgrades during the start of the season. However, they will bring some steady upgrades during the rest of the season.

 

The Mercedes boss also talked about the consequences of breaching the financial regulation. Wolff stated that the results of the introduction of the cost cap would come soon. Toto felt the truth about every team following the cost cap last year would come out eventually. He added, \”So I think you know, you can\’t get that wrong if you\’re breaking the rules in the same way you do when breaking the rules on technical stuff.\”