FIA Announces 2023 Formula 1 Team Cost Cap Verdict

Saajan Jogia | Sep 11, 2024

May 4, 2024; Miami Gardens, Florida, USA; Red Bull Racing driver Max Verstappen (1) lead the field into turn one during the F1 Sprint Race at Miami International Autodrome. Mandatory Credit: Peter Casey-Imagn Images / Peter Casey-Imagn Images

The FIA has announced that its Cost Cap Administration (CCA) has completed its evaluation of the cost cap of all the current teams and engine manufacturers through December 31, 2023. The findings suggest that none of the ten teams have breached the spending limit, but engine suppliers Alpine Racing SAS and Honda Racing Corporation (HRC) made procedural breaches last year.

In 2023, Formula 1 entered its third year under the financial cost cap, with regulations extending to power unit manufacturers for the first time. All ten teams adhered to the spending limits last year, but the report revealed that Alpine and Honda were flagged for “procedural breaches.” Despite this, the governing body assured that neither manufacturer exceeded the cost cap.

The most recent instance of teams exceeding the cost cap occurred in the 2021 season. Red Bull was penalized with a £6 million fine for breaching Formula 1's financial regulations, having overspent by £1.86 million. Additionally, Aston Martin faced a £388,000 fine for a procedural breach.

Revealing the financial review findings of the 2023 season, the governing body stated:

"All 10 F1 Teams found in compliance for 2023.

"4 PU Manufacturers found in compliance for 2023, and Procedural Breaches identified for Alpine Racing SAS and Honda Racing Corporation (HRC).

"The CCA confirms that although Alpine Racing SAS and HRC have both been found to be in Procedural Breach, neither have exceeded the Cost Cap level. Both Alpine Racing SAS and HRC have acted at all times in good faith and are currently cooperating with the CCA to finalise the matter.

"Considering the nature of the breach, the complexities of the new Financial Regulations for PU Manufacturers and the challenges associated with their first year of implementation it is the CCA’s intention to propose to these two PU Manufacturers to settle their respective breaches by means of an Accepted Breach Agreement (ABA).

"A summary of the ABAs, if accepted by these two PU Manufacturers, will be published once finalised as provided for by the Financial Regulations."

The ABA refers to a process where manufacturers acknowledge their infractions and agree to the penalties imposed by the FIA.

The financial regulations outline various procedural breaches, including failure to comply with requests for information or documents, late submissions, and inaccurate documentation. Engine suppliers typically face financial penalties for these types of breaches. However, if the FIA deems the breach severe enough, it may impose sporting sanctions, or it may determine that no further action is necessary depending on the nature of the violation.