FIA closes 2024 cost cap review

Rumours swirled during the Mexico City Grand Prix weekend about possible cost cap infringements. On Tuesday after the race the FIA announced the other nine F1 teams were compliant. Aston Martin’s minor procedural breach was acknowledged as “of a very minor nature, originated by unpredictable circumstances outside the control of the F1 Team.” The five power unit manufacturers were also found compliant.

What the cap covers

Introduced in 2021 to limit spending and protect long-term financial stability, the cap was initially $145m per team and has evolved with inflation. The baseline since 2023 is $135m, closer to around $165m in real terms for 2024. From 2026, with new power unit and chassis rules, the cap rises to $215m.

Excluded areas include marketing, hospitality and the salaries of the top three executives. Included costs cover car design and development, manufacturing, wind tunnel work, race operations, most personnel salaries excluding drivers, transport and spares. Power unit development is outside the cap but faces separate restrictions.

Sauber team boss Jonathan Wheatley said in Mexico City: “I can speak from experience, it’s a very, very difficult thing to balance. You want to be competitive… nobody’s doing it intentionally. You know, these things happen sometimes. Things can just get out of control a little bit.”

Audit and enforcement

Compliance is overseen by the FIA’s financial regulations director Federico Lodi and his team. Submissions run 150 to 200 pages. After initial assessment, on-site visits are made and compliance certificates issued, or cases are referred to an Accepted Breach Agreement or the Cost Cap Adjudication Panel.

Breaches fall into three categories: procedural, concerning reporting; minor overspend, less than 5% of the cap; and material overspend above 5%. Minor overspend can bring sporting or financial penalties. A material overspend can lead to constructors’ championship points deductions and further penalties, with mitigating or aggravating factors considered.

Past cases

In June 2022 Williams accepted a procedural breach for late filing, paying a $25,000 fine via an ABA. In October 2022 Red Bull was found to have overspent by 1.6% in 2021, fined $7m and had wind tunnel testing reduced. Aston Martin was fined $450,000 for a procedural breach in 2021. In September 2024 Honda Racing Corporation and Alpine Racing SAS accepted ABAs for procedural breaches in the first year of power unit manufacturer financial regulations.