In 2021, Formula One launched the cost cap budget for the first time in sports history in order to establish financial stability among all the teams. The financial regulation suggested that spending under the budget of $145 million. Going even a penny beyond the limit will be considered illegal, for which strict sanctions will proceed. However, the twist in the regulations comes when the budget gets reduced by $5 million by each year. With that reference, in 2023, the budget was supposed to be $135 million. But, due to some reasons, FIA has allowed extra spending.
At first, when the budget was initiated, different teams, including Mercedes, Red Bull, and Ferrari, were furious. They believed that the low-cost cap budget was cruel as they had faced any kind of restrictions before. However, despite that, they continued to manage the dominance they had. This year Red Bull won both the championship, including the constructors, after the long drought of 8 years. Luck kept on favoring the Reb Bull the entire season. But it could not save it from the dark shadow of the cost cap budget. During the Singapore Grand Prix, Red Bull was alleged for breaching the budget for 2021, and after the Japanese Grand Prix, FIA released the final reports and proved the rumors to be quite correct. As a result, the team got penalized with a $7 million fine and a 10% deduction in the Wind Tunnel tests.
So even if it is for the ultimate good, the cost cap regulations have created difficulties and pressure for teh top F1 teams, especially for Red Bull. In an interview, Autosport asked Paul Monaghan, Red Bull’s chief engineer, how they are doing things with the penalty and, again, a low-cost cap budget. He said, “It has changed the discipline.”
The Cost Cap Regulation Is Like A Double-Edged Sword,
He explained that there are many aspects, and one of them might have been greater changes which would have cost them more money. But due to the cost cap budget, they are in an enormously privileged position which allows them to do it. He said, “That is a little bit changed tack.” Red Bull engineering disciplines have been changed in order to adapt to the cost cap budget rules. This had brought a disadvantage that prevented the team from using the things they used to in previous years. “We just cannot take on those things now.”
According to the chief engineer of Red Bull, the budget cost cap was nothing but a “double-edged sword”. It is depriving the teams to have the ability to necessary changing their positions in order to increase the performance ranking. However, Monaghan does believe that the regulation is a discipline distributed among all. Teams have got to enjoy the same things. So now, all we gotta do is to see where it regulations take them all.
Besides, the disadvantages that come with the low budget are already hurting. It is affecting the “team’s performance”. He claimed that Red Bull is unable to bring some improved or additional parts in RB18 because they reached the cost cap ceiling. Otherwise, they would have brought a much stronger car.