It is going to be quite exciting to watch Formula 1 races breaking new grounds. They are going for new regulations which are first Financial Regulations which are put together with technical and sporting regulations. As per announcements from last year, it is clear that the cost caps are done to promote a better level of play. This will also ensure long term financial stability and sustainability for the participant teams of Formula One. We also see it obvious that further changes done to financial norms, the corona crisis being the sole reason for such an action trigger.
Taking of the cap applied, it is devised to put a limit to money spent by the participant teams in a calendar year that can impact the race performance. Earlier, the cap was decided for $ 175 Million. Now, seeing the growing losses of the automotive industry, it comes down to $ 145 Million.
Going for the reasons for this step, we can see the evident losses and strains on F1 teams. So, it was a must decision taken by all at a common table, to go for sustainable racing by cutting cost and applying caps. This also comes with the idea of carrying the same set of car for 2021, as the 2020 cars. Now, the larger companies funded by OEMs must go through evaluation for their involvement in F1 racing.