Formula 1 on a slippery slope if teams continue breaching $135m budget cap

When Formula 1 introduced a budget cap at the start of the 2021 season, it was done after many years of trying and figuring out how to curb wasteful expenditure.

Teams like Ferrari, Red Bull and Mercedes-AMG had seemingly bottomless pits of money to throw at car development, forever growing the performance gap between them and the rest of the grid. This costly nature prevented many new teams from entering the sport, too, with Haas the last to do so in 2016.

But things changed significantly in 2021 with the introduction of a $145 million budget cap, decreasing to $140m last year and $135m from this year onwards.

However, it remains challenging for some teams to stick to it, as proved by Red Bull Racing's overspending in 2021.

Following the announcement of the 2021 budgets in 2022, Red Bull team boss Christian Horner warned that teams could be found guilty this year for breaching last year's budget.

"I think what we have set is a precedent. And it sets a precedent for 2022," he said.

"And a danger for 2022 is that there could be six teams in breach of the cap. Energy prices have been exponential, but thankfully we've been protected from that.

"But there is that chance that several teams, many of which have stated it during F1 commission meetings, will break the cap."

Red Bull exceeded the 2021 budget by 1.6%, resulting in a $7m fine and a 10% reduction in wind tunnel time for 2023.

The boss is nervous

With Red Bull hitting the ground running in 2023, it's only reaffirmed many insiders' belief that the inflicted penalty was not harsh enough. It's a feeling shared by Horner.

Teams can thus overspend by 5% in a year to gain an advantage for the next, and take a (small) hit in the year after that. Red Bull's early-season success now