Opinion: How should the FIA improve the cost cap?

Written By Gabriel Tsui, Edited by Vyas Ponnuri

Credit: Reuters, Christian Bruna

In case you weren’t following Formula One closely for the past few years, or have started following the sport recently, the cost cap has been implemented into Formula 1 by the FIA, in an attempt to make the seasons more closely-contested and competitive.

The cost cap can be described as both a success and a failure, with multiple bottom teams such as Haas, AlphaTauri, Aston Martin and Williams challenging for points sometimes, and teams in the midfield being as tightly packed as ever. However, top teams are still dominating the podiums, and no driver outside of the big three other than McLaren’s Lando Norris has stepped onto the podium in the 2022 season.

And this is definitely not what the FIA wanted when they implemented the cost cap. FIA envisioned an extremely close championship battle, with teams outside the big three such as McLaren and Alpine challenging for podiums consistently, and teams lower down the grid challenging for points and high qualifying positions.

The current cost cap includes all types of expenditures entirely related to car performance, such as parts on the car, team personnel other than the top 3 paid staff and drivers, garage equipment and transportation costs. However, the system is far from absolute perfection.

Red Bull was found guilty of breaching the cost cap, with a minor overspend of 1.8 million USD, and were penalised with a 7 million USD fine, and a 10% reduction to their Wind Tunnel testing time. According to Motorsport.com, Christian Horner explained the breach to have included catering costs, RBPT (Red Bull Powertrains), sick pay, and outgoing staff.

It is clear that there were different interpretations to the rules between Red Bull Racing and FIA. Horner believes that all the above factors contributing to the breach were not affecting race performances in any way, with FIA believing the opposite. This led to a belief that the cost cap still has room for improvement. But how?

There are two approaches the FIA has to take towards improving the Cost Cap, whether it’s during this off-season break, or the next season. These new approaches will make it easier for the teams to calculate their spendings, and strictly comply with the cost cap accordingly.

First of all, the FIA has to clearly state what should be included in the cost cap, and what should not in the Financial Regulations document. Currently, the cost cap regulations vaguely state the exclusions of the cost cap. When FIA renews the cost cap, they should definitely be seeking more clarity to the rules so teams can comply.

Secondly, the FIA has to increase penalties for breaching the rules. Red Bull was hit with only a fine and a wind tunnel time reduction, which was generally viewed by the public as not enough. When the first point above is implemented, FIA should also hit teams that overspend with harsh penalties. Some penalties the FIA could apply in this regard are - suspension for multiple races, fines worth at least 60% of the cost cap, no wind tunnel time, no upgrades allowed, and the heaviest of all, a ban from competing in any FIA managed motorsports for years.

These are of course, very extreme measures, which also would lead to backlash within the teams. When FIA renews the rules for 2023 or 2024, they must bear in mind the fact that the penalties must be harsh enough, so as to stop teams from even having a thought of overspending by a single penny.

Concluding all my thoughts, while FIA has indeed taken an initiative to make the competition more watchable, they have to keep going. A job half-done is as good as none. If the FIA truly wants a competitive motorsport, they’ve got to make sure the teams don’t break the rules, and should they do, they must be penalised big to stop them from doing the same again.