Christian Horner has called on Formula 1 to increase the $215million budget cap, claiming “teams are spending $500 or $600million” year on year.
From 2021 the championship has operated under a budget cap system which limits how much a team can spend per season, with it starting at $145m before eventually increasing to $215m.
But that $215m doesn’t cover every single cost made by an F1 team, as driver contracts, the salaries of the top three non-driver earners, travel costs and marketing spend aren’t included.
There are many other aspects not included, whereas there is also a separate $190m power unit budget cap, meaning costs are still astronomically high amid record-breaking team values.
So Horner, whose former Red Bull squad breached the 2021 cap by 5%, thus receiving a $7m fine and 10% reduction in wind tunnel and CFD testing, has urged F1 to rethink the system.
“In the early years there was a bedding into those rules,” he told Autosport. “The things that we got charged with in that first year now would not be an issue, or even in the second year.
Max Verstappen at 2021 Monaco GP
Photo by: Valery Hache
“So I think they've tied it up, a lot of the regulations, what I see now is that you've got a budget cap of just over $200m but teams are spending $500 or $600m.
“More needs to be included within the cap. I think the cap on the engine side, arguably, as an all-encompassing cap, is a good thing, it's just what is that level?
“Formula 1 teams will spend as much money as they have and it's like a balloon with not enough air in it, if you squeeze it one end, the air is going to go somewhere else.
“So you'll now see driver retainers far healthier than they were pre-budget cap and it's finding that right balance and I think all of these businesses now, they're no longer liabilities.
“Even the smallest team on the grid has a multi-billion dollar valuation. Five, six, seven years ago, they would have been seen as liabilities.
“So it's driven real value into these teams, or franchises, that a team like Haas or Williams has come up the rankings.”
Carlos Sainz at 2026 British GP
Photo by: Sam Bagnall / Sutton Images via Getty Images
But Williams is still not particularly happy with the budget cap, as team boss James Vowles claimed this month that the frontrunners benefit from it more than the rest of the grid.
The Briton reckons his team is limited on what it can spend on the car and personnel costs, because it is putting that money towards capital expenditure which falls under the cap.
Teams like Red Bull, Mercedes and Ferrari, however, had already spent heavily on world-class facilities before the cap, so now it can just put that $215m straight into on-track investment.
Despite that, the budget cap has still brought vast positives to F1 with teams more stable than ever, considering Force India is the last constructor to have entered administration in 2018.
“Prior to that, Formula 1 was like having a bucket full of money with a hole in the bottom,” added Horner.
“You'd run as far as you could with it until it ran out and spend a bit more than you actually had. We saw many teams come and go as a result and now with a budget cap, it's driven efficiency.
Esteban Ocon, Force India, at 2018 Spanish GP
Photo by: Sam Bloxham / Motorsport Images
“I remember pre-budget cap, the amount of unused stock that we would have at the end of the season, that had never seen a racing car, it'd be tens of millions of pounds.
“We’d have because the IP, you don't want it to go anywhere, you're not going to destroy it, and so they just sit in warehouses full of floors and wings and suspension parts - something like out of an Indiana Jones, Raiders of the Lost Ark scenario!
“Now with a budget cap you don't have that luxury, so you're much more selective in what you manufacture, how you spend your money, the usage and the consumption of those parts.
“It’s driven a real efficiency into the businesses, so the accounts teams play as big a role as the design teams now in terms of winning grands prix.
“By the time I left, the accounting department was as big as the drawing office because the financial rules are as important as the sporting or technical rule.”
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