In recent years, the FIA and Formula 1 have implemented measures to reduce the phenomenal differences in the development budgets of the cars between different teams. In the 2010s, for example, Mercedes could rely on a budget that was 8 to 10 times higher than the smallest teams, but this will no longer be the case in 2023.
Formula 1 has limited budgets since 2021. Teams are obliged to respect a development budget for the cars (excluding marketing and the three highest salaries) of 145 million euros.
The top teams like Red Bull, Mercedes, or Ferrari used to be able to spend much more with budgets exceeding 300 million euros. However, this was not the case for the teams at the back of the grid. Haas has suffered from a very low budget in recent years, just like Williams or even Sauber, which did not exceed 100 million euros. These significant differences gave Formula 1 a sense of a two-tier championship, with the top 3 teams ahead and the other 7 teams much further behind.
In 2021, with the appearance of the limited budget, teams had to review their operations. While teams with much higher budgets had to scale back, certain other teams like Haas, Williams, or Sauber still didn’t have the necessary funds to reach the authorized maximum budget.
In 2023, the efforts seem to be paying off as, for the first time in the era of F1, 10 teams will be competing with the same budget.
If there is no doubt that Mercedes, Ferrari, and Red Bull will reach this budget restriction of 145 million euros, the other teams are less inclined, due to their position in the World Championship, to reach this limit.
Aston Martin exceeded the budget last year. Therefore, we know that the team has the capacity to reach this maximum budget.
Alpine, thanks to the support of the Renault group and its ambitions, is also already at the maximum allowed budget, just like McLaren, who sold its headquarters in order to allow for massive investments in Formula 1.
What about secondary teams like Williams, Haas, AlphaTauri or Alfa Romeo Sauber?
Frédéric Vasseur announced on Canal+ that finishing in 6th place in the 2022 world championship will allow for an additional 10 million euros to be collected, thereby reaching the maximum authorized budget.
Haas, for its part, achieved a great performance in the championship by securing the 8th position, but more importantly, it also signed a new sponsor, Moneygram. The team announced that this will enable them to reach the maximum authorized budget as well.
Two teams are more discreet. Williams and AlphaTauri.
Williams has been bought by the American fund Dorilton Capital. The fund aims to enhance the team and has therefore invested heavily in the Grove facility. Based on this observation, one can imagine that the budget cap would also be easily reached by Williams, although this has not been confirmed.
On the AlphaTauri side, if the ties with Red Bull on track are becoming more distant, the team benefits from significant financial support due to the fact that the main sponsor of Faenza is none other than one of the brands of the Red Bull group. Therefore, the team should be able to obtain enough budget from Red Bull to reach the budget cap, but again, nothing is confirmed.
According to our estimations, however, we could state that 2023 will be the first year in the history of Formula 1 where the 10 teams will truly compete on equal terms.
However, it should be noted that the lead acquired by certain teams will be much harder to catch up for the lower-placed teams, even with an equivalent budget, since these teams are capitalizing on their development carried out in 2022, especially considering that the technical regulations for 2023 will hardly change.
