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Formula 1: How teams save costs

Formula 1: How teams save costs

While the Haas team wants to save around €235,000 in transport costs alone next season with a new pit wall seating scheme, Red Bull is fully focused on controlling costs. The design world champion received a penalty for slightly exceeding the cost limit in 2021 and has therefore increased its finance department.

Among other things, Red Bull can claim 10 percent less development time in the wind tunnel this season. We have learned from negative experiences. Chancellor Helmut Marko explained to APA: We have significantly increased the number of staff in the financial department.

Reuters/Leonard Figure

Red Bull advisor Marko wants to prevent budget overruns like 2021 in the future

Unlike in the past, the technicians’ ideas are now thoroughly screened against potential costs by the financial experts on the team. We then look at what the potential outcomes might achieve in terms of the “cost ceiling”. “These are almost athletic and tactical games that have to be taken into account,” Marko emphasized.

Uncertainty about the budget ceiling

The budget cap was introduced in 2021 and was $148.6 million. It was created to create the conditions for a fairer framework and to ensure the financial survival of all ten teams. The cost threshold should actually go down from year to year. However, the corresponding base amounts were agreed upon at a time when the current high rates of inflation were not yet foreseen. The higher the inflation rate used as a basis for valuation, the greater the additional cost.

Teams have also brought up another compensation: There is currently an additional $300,000 per weekend per sprint, and there is an additional $1.8 million per race after the 21st race of the season. Therefore, it is not easy to answer the question of where the cap is. The spending limit was originally supposed to drop to $135 million in 2023. Including all surcharges, of which inflation makes up the bulk, it will likely reach its highest level so far this season – and rise to more than $150 million.

Lots of loopholes for teams

Driver salaries, employee travel expenses, salaries of the three most valuable employees, marketing expenses, and engines do not fall within the spending limit. However, the performance-related costs of research and development are limited. The top teams Red Bull, Ferrari and Mercedes have the biggest budgets in the business and therefore have no problems with expensive driver contracts. They are followed at some distance by Claren, Aston Martin and Alpine.

The second half of the season could be crucial for Red Bull this year if there is an arms race with others and then important resources like wind tunnel time are used up. The ability to continuously develop the car has always been a source of strength for the five-time world champion, especially in the year of Verstappen’s first title victory in 2021. In other words, the year in which the racing team spent a lot according to FIA experts.

Haas Team Leader Günther Steiner

Jeba / Mario Buehner

Haas team boss Steiner has to get creative because of a tight budget

Haas has the least means in the field, which starting this season will follow the race with just three employees instead of six in the command post directly at the edge of the track. Explaining the question behind this decision, team boss Gunther Steiner explained in Bahrain: “Do you have six, or do you prefer more updates?”

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