Supporters behind Formula One were disappointed to learn that teams failed to agree on cutting the budget cap. This substantial cut would’ve ensured the protection of smaller organizations that cannot afford the financial implications associated with COVID-19. Formula One and the FIA were initially working together to create a specialized solution, suggesting a maximum budget cap of $130m to $150m. This would’ve been lower than the already agreed upon spending cap for the 2021 Season.
Organizations like Mercedes AMG-Petronas and Renault F1 have regularly favoured higher budgets. Their two of the most significant auto manufacturers across Europe and have the finances to move forward regardless of the pandemic. Teams like Hass and Alpha Romeo are more limited, with their reserve funds limited in comparison to Red Bull or Ferrari. It’s not surprising that Mercedes and Renault would disagree with a decreased budget. Cash is how they dominate their competition.
The lower the funds available, it’s less likely they’ll win over smaller teams. Some motorsport analysts are considering the actions of Renault and Mercedes to be sabotage, enforcing a potential shutdown of small scale teams like Williams F1 or AlphaTauri. It should be noted that all meetings are being held virtually, results would’ve been drastically different if held in person. Mercedes and Renault would’ve most likely folded on the $145 million budget cap for 2021, which would’ve then been lowered to $130m for 2022.
The FIA suggested similar budget caps throughout the 2018 Season. Mercedes AMG-Petronas demanded that these limitations not be imposed, with their vehicles on average costing $400 to $500 million. Mercedes spends upwards of $4 billion yearly on Formula One. Decreasing the budget cap even further would cement Lewis Hamilton not winning another championship in 2021.
The Changes to Design
Those teams remaining after the pandemic has concluded will find themselves changing the design of their vehicles. Aerodynamics will be drastically altered to account for the $175 million budget cap in 2021. McLaren believes that these changes will demand an increased level of overtaking between all teams on the grid. This could mean Ferrari competing against AlphaTauri in original racing conditions.