Top teams asking FIA and F1 management to add inflation surcharge to budget cap in 2022. Top teams asking for inflation surcharge to budget cap.

According to German automobile magazine Auto Motor und Sport, seven Formula 1 teams are asking for an inflation surcharge in the budget cap already for the current championship. Otherwise they warn that the development battle may end as early as June.

“The top teams estimate about 10% of the allowed budget for the development of their cars. So around 14 million dollars. Only the material costs for new parts are calculated.” – Auto Motor und Sport reports. According to this calculation, Red Bull and Mercedes are already close to what they can theoretically spend on new parts in the development battle after the last round of the season, the Spanish Grand Prix. An expert predicts: “If everyone plays it honest, there can be no further development after the Canadian Grand Prix.”

Another team boss admits that “We’ll have to dismiss 50 people” if there is no inflation surcharge in the budget cap this season, while Red Bull team principal Christian Horner adds: “Then some teams won’t be able to take part in the last races.”

In the first year of the budget cap (145mio), the ten Formula 1 teams coped well with the new limit, even if it was a big effort for Scuderia Ferrari, Mercedes and Red Bull, but this year, there are difficult factors. New cars mean that teams do not have the possibility of just taking parts from last year over (-$ 35mio).

At the same time, the inflation is currently at 6.1%. Freight costs have doubled, electricity, fuel and raw materials have become a lot more expensive. That adds up to $8.4 million. Without inflation, the teams would have been able to keep to their normal development schedule. The supporters of the inflation surcharge fear that some teams could overrun the budget by 5%. It would be a minor offence and the penalty is determined by the sports commissioners. With luck, they will get away with it, especially if they also classify it as force majeure given the circumstances.

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This situation could become a make or break for the 2022 Formula 1 world championship. Anyone who adds two more upgrades, even though they don‘t have the budget for it, may very well get a massive competitive advantage as compared to their opponents. There is also concern that costs are being hidden with tricks in other areas. The top teams fear that in this environment there will be a lot of suspicions and accusations in the second half of the season which could hurt Formula 1. And that is whenever someone shows up with new parts, even though they are already mathematically over the limit. As a result, the top teams are asking the FIA and the F1 management to add an inflation surcharge to the budget already this year. Some support the request, but 8 teams need to agree. At the moment, Alfa Romeo, Williams and Alpine are against it, while Haas has not yet decided.