Reason behind the £40m Budget Cap on Formula 1


Rationale behind the cost cap

Believe it or not, the global crisis is once agian the deep culprit of this. Difficult times would mean that costs spent for the Formula 1 race by the owners and sponsors are much likely to be just in the “cost-to-cut” list. I think the FIA is worried to have a financially unhealthy track and thought of this budget cap to make the race stable. Though the FIA knows that the roots of the F1 race lies with the team’s freedom to tinker with the technicalities and strategize upon it, they believe that it must be done in a controlled and responsible environment watching innovation flourish within the teams without having to spend much. There are pros and cons to this cap and some of the teams would be happy and some would be not. Would it totally make a difference to the following years’ race?

£40m Cap exclusions:

  • Marketing and promotion – we want Formula One teams to look good and to entertain their partners. We want manufacturers to show off their cars at exhibitions and city centre displays, and we want teams and their sponsors to promote Formula One through inclusion in advertising campaigns.
  • Drivers and young driver programmes – Formula One is the pinnacle of motor racing. Fundamental to this is attracting the world’s best drivers. Moreover we wish to encourage continued investment in young driver programmes.
  • Engine costs – In order to attract manufacturer owned teams to take up the cost capping option, the FIA have decided to exclude engine costs for 2010 (only)

Ferarri’s threat to quit F1 if the £40m cap pursues

Ferarri is not quite among the happy teams with this issue.

My dear Kimi Raikkonen is not happy with this new FIA regulation. After his contract would expire on 2010, this cap might get him to quit F1. (no Kimi, NO!) He is worried that this would not be F1 anymore and there are a lot of question marks and that it is getting more and more difficult to get everyone happy.

F1 Drivers’ thoughts on the cap:

1. Lewis Hamilton’s say on the budget cap.

2. Button is good with the budget cap. Click here to watch the video-interview.

3. Kimi Raikkonen’s say on the budget cap here.

4. Mark Webber’s doubts.


1. FIA website and its FAQs to the Formula 1 Budget cap and know more about how the FIA came up with the £40m cap, how they would police it and penalities if the cap is exceeded.

2. BMW and Ferrari against the Budget cap here.

3. Ferrari applying for injunction against F1 budget cap article.


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  1. interested 🙂 hehe… well, im not happy about it coz it will totally change what Formula 1 really is. Formula 1 is the fastest race and if they lower their budget, they will compromise the performance of the cars. If that’s the case, then it’s no different than the other races. What would make it different and unique then?

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