Amidst significant contention regarding Formula 1’s power units and which car manufacturer has exploited specific ambiguities within the regulations, one aspect that all teams agree on is that the vehicles competing in Abu Dhabi will appear considerably different from those scheduled to race in Melbourne next week.
The speed of this modification process is considerably less certain, however, given that shipping expenses are now encompassed by the budget cap, in addition to the initial costs of developing new parts. Consequently, teams must meticulously coordinate their upgrade schedules to ensure that performance-enhancing components are introduced at the most opportune logistical moments.
For organizations that choose to outsource their manufacturing, transportation fees are not the sole expenditures requiring strict management.
“Indeed, truthfully, it encompasses everything,” remarked Alpine managing director Steve Nielsen during the recent testing session in Bahrain. “This extends even to the high cost of shipping components, as that is entirely covered by the cap.”
“Half a decade ago, this wasn’t a consideration, but these cardboard containers we all navigate around in the mornings when entering the paddock incur substantial costs to reach us, and that sum is part of your overall expenditure. You cannot bring it to an event if it necessitates air travel.”
“That amounts to tens of thousands, and you can quickly deplete your funds if you disregard such details.”
Team freight
Photo by: Lionel Ng / Motorsport Images
Certainly, alternative methods exist for conveying smaller components. For example, at the 2013 Chinese Grand Prix, this writer happened to share a hotel with members of a racing team and joined them in a minivan journey from the airport. They were transporting an unusually large volume of luggage for what would typically be a fortnight’s travel.
“Novel aerodynamic elements,” one person explained, somewhat guardedly.
Naturally, this approach has limitations: it’s impossible to fit a new car floor into a travel bag, regardless of how well it’s cushioned with clothing. For larger items, the options are ocean shipping or road transport, both of which are slower, and the latter is only feasible for European events.
The imperatives of competition will undeniably complicate this situation. A team that is underperforming might conclude that the potential gains from accelerating an upgrade justify the expense. However, even this decision could result in unforeseen expenditures.
“It’s a trade-off,” Nielsen stated. “If it promises 20 units of downforce, then clearly you’ll airfreight it. If the benefit is minor, you won’t.”
“Therefore, I’m unsure if other teams operate this way, but we have recently begun scrutinizing our entire spending: how we allocate funds, whether we manufacture items internally or externally.”
“This extends even to when we utilize external suppliers, which we do occasionally; they experience busy periods where prices are elevated, and quieter times when costs are lower. So, even considering that, it all helps maximize your restricted financial allocation.”
Pierre Gasly, Alpine
Photo by: Sam Bagnall / Sutton Images via Getty Images
The financial constraint was initially proposed in the late 2000s by the then-FIA president Max Mosley, but the concept did not gain traction at first. At the time, competitors strongly resisted the idea, even amidst a global economic downturn.
It required more perceptive leadership, coupled with the existential danger posed by the COVID-19 pandemic to F1 itself and its participants, to finalize an accord. Established at $145 million annually from 2021, with a planned reduction to £135 million starting in 2024 (plus an additional $1.8 million per race for each Grand Prix weekend exceeding a base of 21), it has now been adjusted to $215 million.
This adjustment accounts for inflationary pressures and fluctuating exchange rates, rather than representing a genuine increase. Furthermore, this year has seen several shifts in budgetary parameters, such as allocations for sprint events and extra races, and various expenditures previously outside the cap – including transportation costs – now fall within its purview.
“It means we will need to be resourceful in effectively utilizing the budget allocated for development and managing this budget to implement improvements,” commented Ferrari team principal Fred Vasseur.
“Certainly, the sooner the better, and the more impactful the better. However, it’s not a guarantee that you’ll begin introducing four or five upgrades within the initial few races.”
“If you’re compelled to airfreight a floor to regions like Japan or China, you’re essentially depleting half of your development funds…”
