F1: Cost Cap increased $3.6M for 2023, before inflation adjustment

By Mark Cipolloni.

Formula One first announced a budget cap would be implemented in 2019, and it started in 2021 with a limit of $145 million. It was scaled down to $140 million for 2022 and drops to $135 million for 2023, excluding driver salaries and engine costs.

In 2022, an allowance was made for inflation, plus an additional $1.2 million for the one additional race above the 21-race limit originally agreed to.  Hence, the final 2022 cost cap was set at $142.4 million instead of $140 million.

The inflation adjustment for 2023 is yet to be announced, but the FIA announced on Tuesday that an increase of the cost cap adjustment for additional races above 21 was bumped up from the previous $1.2 million to $1.8 million per race on the basis that the trend of the additional races being added to the calendar has been towards flyways, which are more expensive.

Given the 2023 calendar includes 23-races, two above the 21, the teams will be allowed an additional 2 x $1.8M = $3.6 million.

Hence, before an inflation adjustment, the base cost cap for 2023 is $135m + $3.6m = $138.6 million. If there is an inflation adjustment as well, that number is likely to approach $140 million for 2023.