Revealed: New ‘political’ battleground emerges in F1’s budget cap era

Sam Cooper
Christian Horner speaks alongside James Vowles and Guenther Steiner. Monaco, May 2023.

Christian Horner speaks alongside James Vowles and Guenther Steiner. Monaco, May 2023.

F1 pundit Tom Clarkson believes CapEx limits have become the new “political game” in the world of Formula 1.

Pre-2021, teams were free to spend as much as they liked both in developing their car and also the factory that produced it but with the arrival of the cost cap, that all changed as teams now face much stricter budgets.

With an annual budget of $145m, James Vowles revealed that teams are also able to spend $36 million spread across four years on CapEx or capital expenditure.

This is money allocated by a team to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land but Formula 1 has found itself in a situation where there are some teams that have spent hundreds of millions refurbishing their HQ before the cost cap, while anyone wishing to do so these days is unable to.

Vowles spoke to Clarkson on the Beyond the Grid podcast and spoke of his frustration at being unable to improve their factory enough to be competitive.

“[Vowles is] saying that Williams will never be competitive if they’re only allowed to spend that sum of money,” Clarkson revealed on the F1 Nation podcast. “Capital expenditure needs to be increased.

“Something very significant has happened this week, which I think is going to help Williams and that is that Alpine have just announced that some private investment is going to be made into the team to the tune of 200 million euros in exchange for a 24% stake in the team which is significant for two reasons.

“One is that it values Alpine at just over 900 million euros. Now, when you think back to a couple of years ago, when Claire Williams sold the Williams team, all I will tell you is that it was for significantly less than that.

“So what an ecosystem, Liberty and Formula 1 have created, the value of these teams has just gone up so dramatically in the last two years. That’s what one of the things that this investment proves.

“But also, now that Alpine have this 200 million to spend, I think they’re going to be batting on the same side as James Vowles saying we need to upgrade our facilities in Enstone, we need to increase the capital expenditure and there only needs to be five teams in agreement for that to happen.”

But they could meet opposition from the likes of Mercedes, Aston Martin and Red Bull who already have state of the art factories having spent the money in a pre-cost cap era. It is that reason that Clarkson believes this could be the new political game of F1. recommends

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“The likes of Aston Martin, for example, have just moved into their new factory at Silverstone,” Clarkson continued. “They managed to get all that through on the payments side of it before the cost cap came in.

“Red Bull have spent literally hundreds of millions of dollars over the last 20 years building up their infrastructure, Mercedes the same.

“So for the guys at the front, they’ll say you guys just stay where you are, thank you very much. We’re quite happy with the 30 odd million over four years. That’s enough for us.

“Formula 1’s a political game, isn’t it?”