From 2021, costs will be capped at 145 million US dollars with a limit of 140 million USA dollars for 2022 and 135 million USA dollars for 2023-2025, based on a 21-competition season, said a FIA statement.
The budget cap is to be reduced to US$140 million for 2022 and US$135 million for 2023 to 2025, based on a 21-race season, the FIA said in a statement.
This new rule states that the lower the team finishes in the constructor's championship, the more time they will get more time in a wind tunnel to do aerodynamic testing to develop next year's vehicle.
After years of negotiations it was announced last October that a cap of $175m per team would be implemented annually from 2021, in a bid to reduce spiralling costs in the championship.
"A uniform budget cap, in concert with more even distribution of revenue among the teams, will ensure greater competition and more people wanting to watch live and on TV, driving more sustained revenues to underpin the long-term financial health of the teams and the sport".
F1's lowered budget cap of $145m has been approved by FIA. They are definitely going to allow us to compete with what used to be big teams because they can't be big teams anymore.
As part of an attempt to reduce downforce for 2021, teams will also have to trim part of the floor, that will prevent new tyre compounds needing to be created for next season.
With as many as 10 races in the 2020 calendar either cancelled or pushed back, F1 has taken a significant financial hit.
- Starting next season, there will be a limitation on the number of upgrades a power unit manufacturer can do over the course of an F-1 season. A token system has been devised to permit a very limited number of modifications in accordance to the competitors' specific needs. The point of the budget cap is to restrict the cost of racing to the point that you can't throw 50 people at developing xyz as it might be a good idea.
For 2021, minimum mass increase to 749kg.
Sweeping new regulations are due to come into effect in 2022 after being postponed from next year.
For 2022, a number of key specific aspects of the regulations have been set out, including curfews, restricted number components (RNCs), scrutineering, and parc fermé prescriptions.
Costs incurred for staff entertainment (capped at $1M).
It is hoped that both measures will help close Formula One's competitive order, while also protecting teams financially in the post-coronavirus world.