The FIA's single-seater financial regulations director has
explained how the governing body made "concessions" to F1 teams,
with the cost cap set to be increased in 2026. First introduced in
2021, F1 teams have been limited in what they can spend, starting
out at $145 million USD, and gradually decreasing year-on-year. For
2023-2025, the limit has stood at $135 million, although this has
been adjusted to reflect global inflation, with the current 10
teams based in three countries: the United Kingdom, which uses
Pound Sterling, and Italy and Switzerland, which use the Euro with
prize money paid in US dollars. However, for 2026, F1's new era
will be met with a significant rise in the cost cap up to $215
million USD (£159.6 million) to reflect the new regulations, as
well as taking into account other associated costs. On top of
this, Audi, entering F1 for the first time, is set to receive a
higher cap as salaries in Switzerland are around 35-45% higher than
in the UK and Italy. As part of the 2026 cost cap rules, exceptions
such as driver salaries and those of the three-highest earners in
the team are set to continue to be in place, as financial
regulations director Federico Lodi explained how the FIA has acted,
but how the actual effect on teams will be minimal. "There have
been some adjustments we have been taking into account with setting
the cost cap, based on the [worldwide] inflation since 2021, with
the accumulated effect being factored into the cost cap level,"
Lodi told RacingNews365 in an exclusive interview. "So the level of
$215 million USD (£159.6 million GBP) that was set for the team
from 2026 is basically the result of two things. "The starting
level is the cost cap of today, there is the effect of the
accumulated inflation, plus there is the effect of the costs which
are currently outside of the perimeter that we have brought in.
"So all in all, there is not really an increase of capital, it is
just a different way to perform the calculation – and that was the
main reason behind the decision to introduce a higher cost cap
level. "It will not consist of higher spending for the teams,
because they are simply already incurring the costs, but they
simply bring it into the cap, and so the cost cap needs to be
higher. "Framing the rules is quite complicated, drafting them is
not an easy task because you have 10, now 11 [with Cadillac]
different teams with different agendas, perspectives and
priorities. "I think it is fair to say that if we had the
opportunity to write the regulations by ourselves, probably the
regulations would appear slightly different, but obviously, we need
to have a consensus. "So we need to make concessions, and that is
why we've ended up with having 20-25 exclusions rather than just
five or six, which would be our preference. "It is complicated, but
that is the challenge of having all the teams support a proposal
that we make, so there is a lot of work behind the scenes to
discuss and convince them, and that takes time." The article
continues below. "We need to make concessions, and that is why
we've ended up with having 20-25 exclusions rather than just five
or six, which would be our preference." Federico Lodi – FIA
Single-Seater Financial Regulations Director A potential criticism
One criticism of the cost cap has been that the rank-and-file of F1
teams are the personnel to lose out now teams are restricted in
their budgets. However, Lodi firmly believes that the budget is
"self-policing" as it places no burdens on what or where teams can
spend their money. "One of the guiding principles we used in the
drafting of the regulations is that we did not want to introduce
limitations for specific types of costs, so the teams are free to
spend within the cap. "They have a pot of $215 million, it is their
choice if they want to put a lot of resources into the mechanics or
the junior employees because they believe that that is more
relevant than spending money in another area. "But if we take a
holistic approach, things should balance by themselves, because if
you start putting too much pressure on people, you start to lose
them, so it is self-policing. It is a free choice of teams where
they decide to spend the money.
explained how the governing body made "concessions" to F1 teams,
with the cost cap set to be increased in 2026. First introduced in
2021, F1 teams have been limited in what they can spend, starting
out at $145 million USD, and gradually decreasing year-on-year. For
2023-2025, the limit has stood at $135 million, although this has
been adjusted to reflect global inflation, with the current 10
teams based in three countries: the United Kingdom, which uses
Pound Sterling, and Italy and Switzerland, which use the Euro with
prize money paid in US dollars. However, for 2026, F1's new era
will be met with a significant rise in the cost cap up to $215
million USD (£159.6 million) to reflect the new regulations, as
well as taking into account other associated costs. On top of
this, Audi, entering F1 for the first time, is set to receive a
higher cap as salaries in Switzerland are around 35-45% higher than
in the UK and Italy. As part of the 2026 cost cap rules, exceptions
such as driver salaries and those of the three-highest earners in
the team are set to continue to be in place, as financial
regulations director Federico Lodi explained how the FIA has acted,
but how the actual effect on teams will be minimal. "There have
been some adjustments we have been taking into account with setting
the cost cap, based on the [worldwide] inflation since 2021, with
the accumulated effect being factored into the cost cap level,"
Lodi told RacingNews365 in an exclusive interview. "So the level of
$215 million USD (£159.6 million GBP) that was set for the team
from 2026 is basically the result of two things. "The starting
level is the cost cap of today, there is the effect of the
accumulated inflation, plus there is the effect of the costs which
are currently outside of the perimeter that we have brought in.
"So all in all, there is not really an increase of capital, it is
just a different way to perform the calculation – and that was the
main reason behind the decision to introduce a higher cost cap
level. "It will not consist of higher spending for the teams,
because they are simply already incurring the costs, but they
simply bring it into the cap, and so the cost cap needs to be
higher. "Framing the rules is quite complicated, drafting them is
not an easy task because you have 10, now 11 [with Cadillac]
different teams with different agendas, perspectives and
priorities. "I think it is fair to say that if we had the
opportunity to write the regulations by ourselves, probably the
regulations would appear slightly different, but obviously, we need
to have a consensus. "So we need to make concessions, and that is
why we've ended up with having 20-25 exclusions rather than just
five or six, which would be our preference. "It is complicated, but
that is the challenge of having all the teams support a proposal
that we make, so there is a lot of work behind the scenes to
discuss and convince them, and that takes time." The article
continues below. "We need to make concessions, and that is why
we've ended up with having 20-25 exclusions rather than just five
or six, which would be our preference." Federico Lodi – FIA
Single-Seater Financial Regulations Director A potential criticism
One criticism of the cost cap has been that the rank-and-file of F1
teams are the personnel to lose out now teams are restricted in
their budgets. However, Lodi firmly believes that the budget is
"self-policing" as it places no burdens on what or where teams can
spend their money. "One of the guiding principles we used in the
drafting of the regulations is that we did not want to introduce
limitations for specific types of costs, so the teams are free to
spend within the cap. "They have a pot of $215 million, it is their
choice if they want to put a lot of resources into the mechanics or
the junior employees because they believe that that is more
relevant than spending money in another area. "But if we take a
holistic approach, things should balance by themselves, because if
you start putting too much pressure on people, you start to lose
them, so it is self-policing. It is a free choice of teams where
they decide to spend the money.
The post FIA reveal 'concessions' to teams ahead of major F1 rule tweak appeared first on RacingNews365.