The capped budget will drastically increase for 2026

Note: The figures presented are given in dollars to provide a stable reference over the years without considering exchange rate fluctuations. As of now, 1 € is approximately equivalent to 1.07 US$. Therefore, the figures presented are slightly lower in euros.

Established in 2021, the initial limited budget was set at $175 million per team. This budget was further restricted in 2022 to $135 million to have a more significant impact.

The goal of the limited budget is to give lower-ranked teams a chance in terms of performance against teams with almost unlimited budgets like Red Bull, Mercedes, or Ferrari, which tended to create an increasingly difficult gap to bridge year after year.

This mission has been successful to say the least, as from $175 million in 2021, it was reduced to $138 million in 2022 before gradually increasing again in recent years to keep up with the rising number of Grand Prix, the costs associated with the introduction of sprint races, and also the indexation of inflation. Thus, the 2023 budget had reached around $153 million according to our calculations and finally $165 million this 2024 season.

If next year, in 2025, the financial regulations do not change dramatically, it will be different in 2026, when with the arrival of Audi and Cadillac and the new aerodynamic and engine regulations, the budget will be significantly revised.

A major increase in 2026

In 2026, in the latest financial regulation published by the FIA this Thursday, December 12, 2024, the base amount allocated will be 215 million dollars. That is still 50 million dollars more than this year, representing an increase of +30.3%.

If the base is higher, it no longer takes into account certain variations such as sprint races, which until now represented an additional $300,000 per race in the budget. Similarly, considerations for the location of the headquarters should emerge, with variations depending on the country where the teams are located, in order to balance certain disadvantages such as taxation or taxes.

This compensation would allow Sauber, whose team is based in Switzerland with average salaries significantly higher than in Europe, to slightly increase the team's total budget, which has since been acquired by Audi.

Compensate for the arrival of major manufacturers?

The financial regulations were introduced in 2021 to balance the so-called "sporting" expenses that have a direct impact on track performance. It is clear that it has worked since, in 2024, Haas was regularly fighting in the top 10, for example, despite its overall budget being much lower than teams like Red Bull or Ferrari.

In 2023, the 10 teams were for the first time under a limited budget. They were therefore playing on a level playing field, but before compensating for the structural advantages taken by the big teams that made huge investments, particularly in supercomputers, simulators, or wind tunnels, the smaller teams have a lot of room for improvement.

This increased 2026 budget will notably help to compensate for research needs related to the development of new aerodynamics on single-seaters and especially to assist in improving engine reliability.

However, with the budget increase in 2026, it is fair to wonder if these teams without major investors behind them, such as Haas, will be able to reach this higher budget and therefore compete on the same level as the newcomers: Cadillac (supported by GM and Andretti), Sauber, backed by Audi, and the other current super-teams like Red Bull, Mercedes, Ferrari, and now Aston Martin.