Williams team principal James Vowles has clarified his suggestions that Formula 1’s cost cap should be revisited, stating that rules on capital expenditure continue to lock in a competitive advantage for the top teams.
On joining Williams ahead of 2023, Vowles was one of those who lobbied for extended capital expenditure breaks for the lower-ranked teams in the championship under the old cost-cap rules. Initially, this was a separate $36m capital expenditure cap over a five-year period, but was later changed to a sliding-scale format based on the teams’ position in the championship. This meant that Williams, along with AlphaTauri (RB), Alfa Romeo (Sauber), and Haas, got around $20m extra allowance to spend in that period.
Since the capital expenditure limits now slot within an extended overall cost cap, totalling $215m per season, this theoretically allows greater CapEx spend per year. However, this is subject to straight-line depreciation, effectively forcing the amortisation of the cost over a fixed term.
Vowles stated that he needed to spend around $200m to catch up to the top teams in the championship. Over a 10-year period, this would take $20m out of the team’s cap per season, limiting what it can spend on the car and on personnel costs.
He added that this ensures teams that spent heavily pre-cap have a baked-in advantage, one that cannot be overcome with the rules as they are.
“Everyone I’ve spoken to can understand it because it’s ultimately, whilst I’m putting it through a lens of this is not a fair fight, this is not playing with the same tools, it’s not a meritocracy,” Vowles stated.
“It’s actually an inverse BOP championship we’ve done. Whatever investment you made seven years ago is what’s deciding how performant you can be today, which is not what we should be doing.
“The support has actually been there, irrespective of talking to individuals, because there is a lens that everyone understands the sport is better off if it actually ends up being a meritocracy.
“That said, it would always be difficult for a team at the moment that has these assets to accept that they will be weakened in that position. What I’ll say is, the number of votes, I think we’re already there on in terms of number of votes, but it isn’t just about that. It’s actually about finding the right solution for the sport long term that gets us to where we need to be.
Vowles stated that F1’s cost cap had worked for financial stability, but had failed in allowing the F1 field to shrink – instead, he argued that the competitive order has expanded since before the cap.
Alexander Albon, Williams
Photo by: Andy Hone/ LAT Images via Getty Images
He added that the financial burden of having outdated facilities doesn’t stop at capital expenditure, and that the inefficiencies in processes leads to increased manufacturing costs – Vowles estimates that Williams ends up paying 30% more than a “Big Four” team per part.
“In terms of sporting equity, we’re not there. What we have locked in is whatever you invested seven years ago, and that is now really, really hurting. The other one is competitive advantage; the field should be compressing, but it isn’t. You don’t have to use my stats.
“You can go and look it all up. There were fewer points scored now by the bottom five or six teams, depending on how you count it. The top four is scoring more in cost cap than they were before.
“It always tells you it’s the other way around. You don’t need me to tell you it’s there. Another stat is there’s been one win that hasn’t been a top four team in the last 130 Grands Prix [Esteban Ocon’s win at the 2021 Hungarian GP for Alpine].
“Previously, you used to have someone that’s not on the top four team on the podium before cost cap 10% of the time. Now it’s 5% of the time. It doesn’t matter what stat you choose, you will find we have made it worse. Why have we made it worse?
“What we’ve done is lock in investment that happened before, and what the cost cap did is said you can’t invest anything anymore. You’re locked in. That’s 36 million total of CapEx that you can spend across that entire, I think it was five years in the end, which, frankly, you spend more on machine tools getting those replaced than you do in that, so it’s nothing.
“It’s not a problem now, and you can invest what you want in CapEx, but you’re going to have to take your depreciation hit in cost cap, and depreciation typically for us is five to 10 years. So if I take the assets that I need, and this will be a shocking number to all of you, I could spend my entire budget, my opex [operational expenditure] budget, for one year in all the facilities I need. It’s 200 million.
“That’s what I’m missing right now, and that means every year across 10 years, I’ll take another 20 million of a hit for coming to that compared to my rivals down the road. That’s not a fair fight. I’m not asking for special treatment.
“What really accentuated it is I had to go through a regulation change with Williams. And this is a very large regulation change, but I had to go through that to fully expose the amount that we are behind. Because right now, again putting some pretty harsh words on the table, we are paying more.
“I gave a number. It’s about 25%, 30% more than the top team for parts that come about four weeks later. That is the current situation.
And you got really exposed this winter when you’re trying to do 55,000 of those components in one go. In a year, even into next year, it will hurt you less. But one of the key reasons why I’m speaking up now about this is we’re talking about a large regulation change, again for 2030 or 2031, such as when it comes in.
“And even if today someone said, here you go, here’s the ability to go and spend 150 million, you can’t buy it all in in a week. It takes years to get that in place. And what I’m trying to do is make sure that as we get into this next regulation change, we actually change the way the sport is operating.”
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