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In accordance with FIA financial regulations, the 2023 budget is set at $135 million, representing a 3.1% increase reflecting inflation in 2022, but additional adjustments bring the total to over $153.8 million.
In 2022, the spending cap was set at $140 million (equivalent in euros) for the 21-race calendar. Added to this are three sprint events, each worth $150,000, and an additional $1.2 million allocated to the 22nd race, bringing the total budget for 2022 to $146 million.
Base budget of $135 million The main objective of the cost cap is to level the playing field, giving smaller teams a chance to compete with the big-spending teams. The cap covers all expenses related to the development of the car, but excludes marketing costs and the three highest salaries on a team, and driver salaries are also not included.
For 2023, with a 23-race calendar, the FIA has set a base allocation of $6.42 million for each of the first 21 races, plus an additional $1.2 million per race, for a total of $137.4 million.
Reassessment of sprint races Sprint races are more expensive than a standard Grand Prix, as the 100 km covered adds financial and mechanical risk. As a result, the FIA has added $150,000 to the cap for each sprint. While only three sprints were planned for 2021 and 2022, the 2023 calendar includes six. To account for the additional risk, the teams negotiated a doubling of the sprint allowance, adding $300,000 per sprint for a total of $1.8 million.
Damage related to accidents is normally included in the cap, but incidents occurring during sprints are treated differently. The FIA allows teams to add up to $100,000 per sprint for justified damage, bringing the development budget to $139.2 million. Inflation adjustments for 2021-2022 Due to high inflation, the cap has been increased by 3.1% as stipulated in the regulations—this is the first adjustment of its kind, and probably not the last. After this increase, our calculations put the 2023 budget at $143.51 million. The regulations also link the cap to the average G7 inflation rate, which was 7.2% in 2022. Applying this figure would bring the cap to $153.84 million (or the equivalent in euros). Variable budgets per team Since damage incurred during sprint races can be added to the cap, individual team budgets can vary significantly. A costly accident during a sprint could easily exceed the $2 million cushion that some teams enjoy, making the figures presented here a minimum estimate.
2023 budget compared to 2022 – 21 races: $135,000,000 – 2 additional races: $2,400,000 – 6 sprints: $1,800,000
– Inflation of 3.1% (2021): $4,315,200 – Inflation of 7.2% (2022): $10,333,094 TOTAL: $153,848,294
Compared to the $146 million cap in 2022, the limit for 2023 is approximately $7.8 million higher. Instead of seeing the expected annual reductions, teams are now facing a higher cap, largely because inflation is eroding the effectiveness of cost-limiting measures. The FIA had initially promised a gradual decrease, but in 2023, all F1 teams could still reach the maximum development budget.
