The Japan Times - Top teams set to break F1 budget cap this year

Team chiefs representing Ferrari, Mercedes and Red Bull told reporters at the Monaco Grand Prix on Saturday that it was inevitable due to global inflation, notably in the cost of air freight.

The International Motoring Federation (FIA) introduced a limit of $145 million (dollars) last year and trimmed it this season as part of the sport’s new era package aimed at creating closer racing.

Ferrari team boss Mattia Binotto said: "There will be no way for us to stay below – at some stage, we will go over.”

Mercedes director of trackside engineering Andrew Shovlin said his team boss Toto Wolff was in agreement.

"We had a plan, to land on the budget cap and work within it, as everyone did," he said. "But as costs, like freight, came in at multiples of that or energy and the effects of inflation, it has gone to a point where it is insurmountable."

Red Bull team chief Christian Horner agreed and pointed out the danger of cost control becoming a more competitive element than it had ever been in the past.

"We need to do a better job on the regulations," he said, saying they did not encourage inexpensive cars.

"The engine regulations for 2026 – nothing is cheap about them and it puts an artificial pressure in there.

"We could end up with more people in our accounting office than in the design office – and we don’t want it to be an accounting championship."

Binotto added that the regulations allowed a five per cent threshold beyond the budget cap, within which a breach would be considered minor.

But he asked: "What is a minor breach, in case of force majeure? The stewards and the FIA will decide on that, but in terms of penalties, (we have) no idea."

He dismissed redundancies at Maranello as a solution.

"I don’t think that is a good choice or a right choice," he said. "It is already summertime by the time you organise it and the benefit is not sufficient to cope with the excess of prices and costs."

Asked about the implications of breaking the budget cap, Binotto added: “For me, the most important is that many teams will breach it and that will simply be bad for the financial regulations,

"If we come to the point where we are breaching them, then we are debating its value… We will start to debate if the financial regulation is worthwhile, is it working and put everything back into a discussion.

"We need to avoid that because it‘s important to have a cap somehow. The only way is to take a breath, take more time and try to do a better and proper job for next year."

Horner added that it would be difficult to find a majority of teams in favour of changing the threshold.

"But you have to look at the bigger picture. Is this a force majeure event? I would say an act of war that has driven inflation is a force majeure event," he said.

M.Yamazaki--JT