Editing Formula One (section)

=== Cost cap ===
Since the beginning of Formula 1 back in 1950, the sport's governing body has not had any regulations limiting the spending of a team. This has led to a pattern where teams with large budgets perform significantly better than their competitors and the gap has only continued to increase.<ref>{{Cite web |last=Beggs |first=Luke |date=11 March 2021 |title=Visualising F1 performance and budget |url=https://luke-beggs.medium.com/visualising-f1-performance-and-budget-f7ad71460ec |access-date=5 October 2024 |website=Medium |url-status=live |archive-date=30 July 2023 |archive-url=https://web.archive.org/web/20230730231412/https://luke-beggs.medium.com/visualising-f1-performance-and-budget-f7ad71460ec}}</ref>

For instance, in 2019, the richest teams such as Mercedes and Ferrari spent $420 million and $435 million respectively,<ref>{{Cite web |last=Rencken |first=Dieter |date=2 January 2020 |title=The cost of F1 2019 part two: What the top teams spent |url=https://www.racefans.net/2020/01/02/the-cost-of-f1-2019-part-two-what-the-top-teams-spent/ |access-date=5 October 2024 |website=RaceFans.net |language=en-GB}}</ref> whereas teams such as Williams or Haas, only spent $125 million and $150 million respectively.<ref>{{Cite web |last=Rencken |first=Dieter |date=27 December 2019 |title=The cost of F1 2019: Team budgets analysed – part one |url=https://www.racefans.net/2019/12/27/the-cost-of-f1-2019-team-budgets-analysed-part-one/ |access-date=5 October 2024 |website=RaceFans.net |language=en-GB}}</ref> This gap was widening by the season and disparities like this prompted the FIA to introduce a cost cap in February 2021.

The FIA proposed the cost cap as a measure to reward engineering prowess over sheer expenditure. They did this in an effort to bridge the gap between the midfield teams and the teams challenging for the driver's and constructors' titles.

The cap was $175 million in 2021, although was reduced further to $145 million in response to economic turmoil due to the [[COVID-19 pandemic]]. For 2022, the cost cap was further reduced to $140 million and in 2023 it fell to $135 million where it will remain for the 2024 and 2025 seasons.<ref name="globalsportsadvocates.com">{{Cite web |title=What You Need to Know About the F1 Cost Cap |url=https://www.globalsportsadvocates.com/blog/understanding-the-f1-cost-cap.cfm |access-date=14 September 2024 |website=Global Sports Advocates, LLC |language=en |url-status=live |archive-date=3 November 2024 |archive-url=https://web.archive.org/web/20241103094545/https://www.globalsportsadvocates.com/blog/understanding-the-f1-cost-cap.cfm}}</ref><ref>{{Cite news |title=F1 2024: A guide to the season – including calendar, sprint races, teams and drivers |url=https://www.bbc.com/sport/formula1/67787837 |access-date=14 September 2024 |work=BBC Sport |language=en-GB |last=Chowdhury |first=Tasnim |date=23 February 2024 |url-status=live |archive-url=https://web.archive.org/web/20250117032143/https://www.bbc.com/sport/formula1/67787837 |archive-date=17 January 2025}}</ref>

The 2022 season served as a critical test for the effectiveness of the cost cap as it was the year the new regulations were introduced, allowing all teams to start from scratch and build a car that was independent of the previous years. Critics have argued that the cap might not be sufficient to close the gap in competition because it excluded certain expenses like driver salaries, compensation for the three highest paid-staff members, and marketing costs along with loopholes that allowed the likes of Adrian Newey's salary of Red Bull to be excluded from the cost cap.<ref name="globalsportsadvocates.com" /> They also contended that established teams could exploit existing infrastructures and resources accumulated over years, thus maintaining their competitive edge despite the spending limits.

However, an alternative perspective highlights that the cost cap encourages teams to maximise efficiency and foster innovation within their financial means. McLaren started the [[2023 Formula One World Championship|2023 season]] as the slowest car on the track, with their drivers finishing outside the points with [[Lando Norris]] at P17 and [[Oscar Piastri]] at P20. Seven months later, with the right upgrades, they managed to be the fastest car on the grid throughout qualifying and race pace. Facing budgetary constraints similar to their competitors, McLaren focused on strategic engineering upgrades and talent development. Their significant mid-season improvements led to notable on-track success, demonstrating that with clever resource management and engineering talent, teams can challenge the dominance of traditionally wealthier competitors.

McLaren CEO [[Zak Brown]] said that "the cap has been outstanding for the sport." He also went on to say that there is a feeling that at any point in the season, any team can challenge for a place it wasn't equipped to do so at the start of the season.<ref>{{Cite web |last=Noble |first=Jonathan |date=1 February 2024 |title=McLaren: Backmarker "threat" shows F1's cost cap is working |url=https://www.motorsport.com/f1/news/mclaren-backmarker-threat-shows-f1-cost-cap-working/10570752/ |website=Motorsport.com |url-status=live |archive-date=14 January 2025 |archive-url=https://web.archive.org/web/20250114131526/https://www.motorsport.com/f1/news/mclaren-backmarker-threat-shows-f1-cost-cap-working/10570752/}}</ref>

The critics have expressed that the impact of the cost cap suggests that engineering excellence and strategic ingenuity can indeed offset the advantages of larger budgets. By promoting a more balanced competitive environment, the cost cap has made Formula 1 more exciting for fans and more viable for teams.