After a decade of deliberation, Formula One finally introduced its cost cap in 2021. Prior to this, the sport had become an arms race, with the bigger teams spending hundreds of millions more in the race to top the world of motorsport.
Manufacturers like Toyota and BMW came and went, and the three new teams who started in 2010—Manor, Caterham,and HRT—struggled on for a few seasons before giving up the ghost. Bernie Ecclestone had taken the sport as far as he could in terms of marketing and raising money, so in 2017 CVC Capital Partners sold their stake as commercial rights holders to Liberty Media.
The US-based company immediately changed the philosophy of how to make more money. The exclusivity angle was dropped, and social media was embraced. Sponsors and partners have almost trebled over the past decade, and yet there remained a number of racing outfits vastly underfunded when compared to the likes of Mercedes, Ferrari, and Red Bull.
There were two primary goals of the cost cap, the first being to somewhat level the playing field in the hope the smaller teams would be able to compete better with those at the front. The second goal was to promote financial stability and prevent teams from overextending themselves and going bankrupt.
And to a certain degree, the cost cap has worked, although it is ever-evolving. Unlike for the last big engine regulation change in 2014, where Mercedes massively outspent their rivals on their new power units, this time a cost cap was introduced for the manufacturers in an attempt to prevent the kind of domination Mercedes enjoyed.
Legacy Facilities and the Williams Struggle
However, it soon became apparent that even with the cost cap relating to building and racing cars each season, some teams remained with a baked-in advantage due to the massive investment they had enjoyed over the past decade. When James Vowles left the well-oiled machine that was Brackley and arrived as the new Williams team boss, he was shocked at what he found.
He discovered the team was tracking the entire build and inventory of 20,000 parts using a single, massive Microsoft Excel spreadsheet. Further, production equipment was decades old, inefficient, and out of date. At the time, there was a capital expenditure (CapEx) cost cap in place, which meant over a rolling four-year period, each team was restricted on the improvements to their infrastructure they could make.
So a team like Williams was locked in the past, with its investors unable to spend what was required to modernise its facilities and processes. Vowles has long since argued there should be some sort of catch-up mechanism for CapEx, but for 2026 the FIA decided to change the entire cost cap system.
The headline number was increased from $135m to $215m, but this included a number of structural changes. Rolled in was the CapEx spend along with 100% staff allocation, which meant if any individual working for an associated company spent any time on F1 work, their entire salary must be included.
Vowles’ Push for a Performance-Based Tier
Yet the debate over how the cost cap can be improved, in particular to help the teams with legacy facilities, has continued.James Vowles is advocating a performance-based point tier, where teams further down in the constructors’ table receive a larger financial budget cap allowance for the following season.
This is similar to the aerodynamic testing allowances currently in place where the lower-placed teams are given more wind tunnel time along with a larger CFD allowance. So, the Williams team boss argues the lower teams should be able to fix their outdated facilities and not be penalised by the depreciation costs, which would mean Vowles’ team has $20m less to spend on racing a year, should they make the $200m investment required.
As part of this pitch, Vowles revealed the shocking fact that currently, because Williams lacks modern in-house manufacturing tools, they pay in the region of 25-30% more per component than top teams, with parts arriving up to four weeks later. Extra operational allowance would help offset this gap.
Toto Wolff and the Case for an Uplift
As the cost cap deliberations have developed this season, unsurprisingly there are teams at the top now complaining about issues they too wish to see resolved. During the recent São Paulo Grand Prix, it was put to Mercedes boss Toto Wolff that teams were running out of parts late in the season due to the cost cap.
Speaking live on Sky F1, the Mercedes boss responded as follows: “I mean, we know why the cost cap happened, but we are so on the edge of things that it would be better to have more. In our case, we are not able to carry old chassis over to next year. Some need to be chopped up, which is quite sad when you look at the record of these cars.
“So every team is under pressure. It’s the same. I would have loved to have a little bit of an uplift,” Wolff stated. “The idea that we had was for more junior personnel that joined the team, that we would have more allowance to pay them better and not have their salaries suppressed in the first 5, 6, 7 years,” Wolff revealed.
Further, he revealed that Mercedes had pitched the idea to the FIA, but “obviously, that didn’t score a lot of brownie points [smiles].” The simple answer to Wolff’s problem is for the teams who often now have in excess of 1,000 employees to cut the number of roles and pay those working better.
Adrian Newey Backs the Catch-Up Mechanism
Then again, in many industries, where someone is learning their trade they receive apprentice-style wages until they are a fully contributing member of their organisation. Aston Martin’s Adrian Newey disagrees with Wolff and believes that the position taken by James Vowles is the way to go.
“If you look at things like wind tunnel testing – and also the engines with the ADUO – then those are both examples where teams that are behind are granted more wind tunnel time or dyno time or whatever it might be than the teams that sit at the front. So, it’s easy from that point of view to then extrapolate that to, okay, if teams are behind, then also give them a small extra allowance on the budget.”
The Broader Health of the Sport
Whilst not perfect, Formula One is in rude health, with most teams now making a profit, which was unheard of a decade ago. Williams F1 was bought from the family back in 2020 for somewhere in the region of $200m by US investment organisation Dorilton Capital. In a recent publication, Sportico now values the Grove-based outfit at a whopping $2.1bn.
Yet if F1 truly wants a racing series where more than the top four are capable of winning races in a season, the likes of Mercedes, Ferrari, McLaren, and Red Bull need to allow the smaller teams like Williams and Alpine to catch up in terms of their facilities and infrastructure.
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A.J. Hunt is Senior Editor at TJ13, where Andrew oversees editorial standards and contributes to the site’s Formula 1 coverage. A career journalist with experience in both print and digital sports media, Andrew trained in investigative journalism and has written for a range of European sports outlets.
At TJ13, Andrew plays a central role in shaping the site’s output, working across breaking news, analysis, and long-form features. Andrew’s responsibilities include fact-checking, refining editorial structure, and ensuring consistency in reporting across a fast-moving news cycle.
Andrew’s work focuses particularly on the intersection of Formula 1 politics, regulation, and team strategy. Andrew closely follows developments involving the FIA, team leadership, and driver market dynamics, helping to provide context behind the sport’s biggest stories.
With experience covering multiple seasons of Formula 1’s modern hybrid era, Andrew has developed a detailed understanding of how regulatory changes and competitive shifts influence the grid. Andrew’s editorial approach prioritises clarity and context, aiming to help readers navigate complex developments within the sport.
In addition to editorial duties, Andrew is particularly interested in how media narratives shape fan perception of Formula 1, and how reporting can balance speed with accuracy in an increasingly digital news environment.
