FIA introduced an annual cost cap of $140m this year which limits total spending on the running of the team , including the price of car upgrades, salaries for personnel, and transportation. The cost cap was brought in place to encourage closer racing and to give smaller teams a fair chance to compete .
But with the Russian invasion of Ukraine and many other factors have contributed to a 7% increase in inflation .Shipping and freight costs and cost of living have grown exponentially .
The teams , in a bid to correct the porpoising effect and improve the efficiency of their cars have been constantly updating their machinery at a significant financial cost .
Red Bull Team Principal Christian Horner has repeatedly warned that there is a serious risk of teams being unable to complete the season because they were unable to remain within the financial constraint of F1’s cost cap and has asked FIA to address the issue as costs continue to soar .
Christian Horner said , “Probably about seven of the teams probably need to miss the last four races to come within the cap this year, from the consensus that there has been up and down the paddock. It’s not just about the big teams now, it’s teams in the middle of the field that are really struggling with the inflationary rate that we’re seeing that could even get worse in the second half of the year.
I think the FIA have a duty of care in a situation like this.” However, Alpine boss Otmar Szafnauer said the increase in costs ‘wasn’t a surprise’ and were still operating under the budget cap.”
Mercedes Team Boss Toto Wolff was on the same page with Christian Horner on this issue , he said , “It’s not that we want to generate more profit, it’s literally allowing people to have their salaries compensated for the extraordinary inflation they are suffering from. So, it’s not that we suddenly want to have more, but let’s stick to the fact when we entered the year and the premises that we ended the year and then let’s look at the numbers now. And then hopefully we can find a way to adjust.
I think the worst for the sport is having a stubborn position that some of the smaller teams think that the big ones are trying to gain an advantage and we’re actually going to screw them by not allowing them to do this and us on the other side seeking to lift the ceiling, which we don’t want to do .”
Haas Team Principal Gunther Steiner is on the other hand strongly supports the current annual cost cap . He said the three top teams claiming extra money would only increase the gap between teams on the grid.
Steiner said , “Mercedes, Red Bull and Ferrari would bring one or two extra updates to the track, which would eventually cancel each other out, and the only result would be to widen the gap to the rest of the teams. This was not the idea behind the budget cap when it was proposed and voted on. “
He also added that they are happy at the moment about their spending so far .He said , “So we are happy people, and for sure, Ferrari will be happy if they’re not at the last four races. ‘He [Horner] is saying you cannot make it, but as a businessman, you need to make it at the end of the day.
You guys [the media] need to make it. If you guys have a budget but you fly business all year and then you say “Boss, I cannot do the last four races because I’ve run out of money”, what’s he going to say? “Should you not have flown economy at the beginning of the year?” You need to manage.’’
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