Toyota’s budget for the 2008 F1 season was a staggering amount of $622.6m, 4 times more than the 2023 budget cap
Formula 1 teams are running under a cost cap, it was introduced in 2021 to level the playing field.
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Toyota Formula 1. Image via Twitter.
Formula 1 teams are known for spending lavishly over the course of the season. But gone are the days they used to throw their money into developing their car without limitation. Since 2021, the teams have been hit with a cost cap. In simple words, this budget cap limits the amount of money a team can spend on its car. The initial amount decided was $175m. But due to the pandemic, a few teams had financial problems. So it was cut down to $145m.
The plan was to limit the amount by $5m per season for 2022 and 2023. So as of now, the budget cap is $135m. Back in the day, Toyota had a budget of a staggering sum of $622.6 million for the 2008 F1 season. That is four times more than the current cost cap. Toyota’s budget included sponsorships, supplier deals, prize money, and team owner contributions. The Formula 1 teams can only dream of spending that much now. Even with a heavy budget, they were able to score only a P5 in the constructor’s championship.
The reason behind the cost cap was to level the playing field. Some teams had a heavy budget, while others did not. This affected their performance. The poorer teams could not catch up with the leading rich teams. A perfect example would be Mercedes and Haas. Mercedes spent lavishly on their car development. It reflected in their performance on the track. They were a force to be reckoned with. Haas, on the other hand, had a modest amount of money and was way behind Mercedes regarding the pace.
It is compulsory for Formula 1 teams to adhere to the cost cap rule
The cost cap is an attempt to give all the teams an equal chance. It is also about saving and sustainability. The teams that breached the cost cap were to be penalized. Red Bull and Aston Martin went over the budget. The FIA fined Red Bull $7 million and reduced their wind tunnel time by 10 percent. However, this reduction in their aerodynamic testing did not have a big impact. Red Bull is still the season’s favorite.
Mercedes AMG Petronas Formula 1 team is at a disadvantage due to the cost cap. The team wants to make changes to their 2023 contender, the W14. The budget cap constraints limit their options. If it were before the cost cap era, Mercedes would have just spent a staggering amount and fixed their issues. Under the current budget cap, they must look for other options while adhering to the budget rules.
The payments related to the car and not the engines come under the cost cap. All parts of the car, from the steering wheel to the wheel nuts, the elements needed to run the car, team personnel, garage equipment, spares, transports, and everything else, are included in the budget. The Formula 1 team must find a way to bring out the efficiency and performance of the cars without overspending.
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Sugantha Meena
(493 Articles Published)