Skip to main content

Formula One is adding cost caps in 2021, so teams are spending even more for 2020

Image used with permission by copyright holder

Formula One is giving its rules a major overhaul for 2021. In addition to cool new cars, the rule changes are meant to address a major current issue with the race series: The massive gap in performance between the richest teams and the poorest. Cost caps for 2021 are meant to level the playing field, but so far all they’ve done is encourage teams to spend even more, reports Motorsport.com.

Teams are gearing up to spend more in 2020 ahead of the institution of cost caps for the 2021 season. Red Bull Racing boss Christian Horner told Motorsport.com that he expects 2020 to be the team’s most expensive year in F1. Why? Because Red Bull will be doing as much development work as possible before the cost caps come into effect. Some of areas of development — such as wind tunnel testing — will be restricted, but Horner said Red Bull is probing the regulations for loopholes.

F1 will never be cheap, but cost caps were designed to give teams with less money a fighting chance. The top three teams — Mercedes, Ferrari, and Red Bull — currently have a stranglehold on F1 because they can spend more money developing their cars. This means those three teams are effectively guaranteed to win every race (a team other than Mercedes, Ferrari, or Red Bull hasn’t won a race since 2013), which nets them more prize money and sponsorship opportunities, creating a vicious cycle.

Beginning in 2021, team budgets will be capped at $175 million per year for any spending related to the performance of the car. Teams can still spend unlimited amounts of money on everything else, including marketing and driver salaries. Wealthier teams will still be able to flex their financial muscles by hiring top drivers but, F1 organizers hope, they won’t be able to gain a performance advantage by throwing endless amounts of money at their cars. Cost caps are designed to remove that specific advantage, theoretically closing the gap between the top three teams and the rest of the field. It could also force teams to develop new tech more cost effectively, making it easier to adapt for use in road cars.

However, it’s unclear if cost caps will eliminate all of the unfairness in F1’s finances. As Autosport points out, certain teams also get a bigger share of F1’s revenue because of individual deals made with organizers. Mercedes and Red Bull negotiated special payments in exchange for long-term commitments to F1, while Ferrari gets a bonus just for having competed in every F1 season. Granted, this applies to teams outside the top three as well. Williams gets a bonus, essentially, for being an F1 institution, even though it is by far the worst-performing team on the grid.

It’s also hard to get around the fact that F1 is just plain expensive. The 2021 rules retain the current hybrid powertrains, which are engineering marvels, but are also incredibly complex and expensive to develop. That’s created a separate performance gap between the handful of engine suppliers, with Mercedes at the top, Ferrari in second, and Honda and Renault further back. At least the new 2021 cars were designed to enable closer racing, possibly allowing smaller teams that put the top-performing powertrain in their cars to punch above their weight.

Editors' Recommendations

Stephen Edelstein
Stephen is a freelance automotive journalist covering all things cars. He likes anything with four wheels, from classic cars…
Infiniti is using Formula One racing to hone its hybrid skills
infiniti and renault sport formula one team engineering partnership projectblacks 1

A modern Formula One car almost looks like no one is driving. The driver sits hunkered down behind crash-protection structures, with just the tip of the helmet visible. But at least drivers keep a high profile when they get out of the cars; the legions of engineers and mechanics that build and maintain F1 cars almost never see the limelight. It’s easy to forget that human beings make technology—and all of the amazing things it does—possible.

But it’s the human element that Infiniti believes is key to advancing both road cars and F1 race cars. Infiniti is partnering with the Renault Sport Formula One team in order to orchestrate a transfer of technology. But instead of sharing exhaust manifolds or computer chips, Infiniti and Renault are sharing people—engineers—in order to make cars better both on and off the track.
“Win on Sunday, sell on Monday”
One of the oldest maxims in the auto industry is “win on Sunday, sell on Monday.” It’s the belief that success on the track will translate into success in the showroom. The connection between road cars and race cars is something valued not just by automakers, but by enthusiasts who want to capture some reflected motorsports glory in cars they can actually buy. But other than having four wheels, Formula One cars and road cars have virtually nothing in common. So, is the connection really such a big deal?

Read more
Tesla Model 3 vs. Hyundai Ioniq 6: Which electric sedan is best?
Front three quarter view of the 2023 Hyundai Ioniq 6.

There are finally some more electric sedan options. For years, the Tesla Model 3 was really the only good electric sedan that comes at a reasonable price -- until, Hyundai recently launched the Ioniq 6. The Ioniq 6 certainly takes some cues from the larger Ioniq 5, but is smaller and sleeker, with a design seemingly inspired by the Porsche 911.

But the Tesla Model 3 is still clearly an excellent option for those looking for an electric car, and who don't want a larger crossover. Which is better? Here's a look.
Design
The exterior design of the Tesla Model 3 and Hyundai Ioniq 6 is quite different. If you've seen a Tesla car before, then you'll immediately recognize the Model 3 -- it looks largely like a slightly different version of every other Tesla (except the Cybertruck).

Read more
Scout Motors Electric SUV: rumored price, release date, design, and more
Scout SUV Teaser

There's another electric SUV on the way, and this one comes with a familiar name. Volkswagen is reviving the classic Scout name for a new electric SUV that's billed as being an "RUV," or a rugged utility vehicle. And, it could well prove itself as the best electric SUV in its price range, when it does finally come out.

The new EV isn't due out for quite some time, but there's already a fair bit that we know about it. Curious to learn more? Here's everything you need to know about the upcoming Scout SUV.
Design
There's very little we actually know about the Scout SUV so far, but we do know a little about the eventual design. A few teasers for the upcoming vehicle have been released, showing sketches of both the SUV and the accompanying pickup truck, along with what's presumably the front of the SUV -- though in a dark environment, with little detail.

Read more