How much does it really cost to race in Formula 1? From the car to a brand new Grand Prix
Formula 1 has been around for some time now. Yet, to calculate the cost of the sport that we have today, we need to take into account only the years after the cost cap was introduced. The game changed once a new set of financial regulations was introduced at the start of the decade. Today, teams need to operate under a cost cap in order to be compliant with the latest set of rules. The cost cap was introduced in order to make the championship more competitive and to guarantee the long-term safety of both the competition and the teams participating.
For all of you who are not new to the sport, the fact that some teams spent without regulations made them be more competitive, and the racing was no longer about the speed and drivers’ talent, but more about which team had more money. Cap was introduced to make the playing field even for every team involved, and that not only resulted in better fan reaction, but also attracted more investors, and also new teams willing to join and compete.
Now, what’s important to know is that the cost cap is only one part of the F1 cost. It is only tied to the expenditure that the teams have tied to the performance of their cars. The blueprint was taken from major American sports such as American football, baseball, and basketball, where MLB, NBA, and NFL have strict salary caps. There’s only so much you can spend on player salaries, and the idea was to bring some of that financial knowledge to Formula 1 via cost cap.
What Makes The Cost Cap?
As we said, it is performance-based. Everything that has anything to do with cars or a team’s performance is now regulated by the cost cap. Design, research, development, and manufacturing of the cars and their parts are all now regulated by the cost cap. What doesn’t fall under it are the salaries of the drivers, the salaries of the three highest-paid staff, sustainability initiative costs, marketing, the legal department, HR, and finance.
The number at which the cost cap started was $145 million in 2021. In the meantime, due to many changes that the FIA introduced, the cost cap went up. From this season, it is set at a staggering $215 million. Despite the high costs associated with the sport, all F1 stakeholders have stated that the cost cap has been a success so far. In the future, the cap will only go up, the same way the needle moves in the NFL, for example. Also, one of the main reasons why it went up is that some of the costs that previously weren’t a part of it now are. Today, we have annual depreciation costs instead of a four-year rolling period of separate capital expenditure that was set at $36 million. From this season, all time and money spent on F1 and non-F1 projects need to be done under the cap. What’s still excluded are the safety and health costs. Also, teams who do not spend their entire cap can roll $2 million over to the next year.
Power Unit as a Separate Cost
F1 engine cost is no small part of a Formula 1 team’s expenditure. Yet, it is separated from the general cost cap. The power unit cost cap came two years after the basic cost cap was set in place. Considering that F1 required new units for teams, a cap was set on how much teams can spend on their engines. As you know, all teams are now required to have a 50/50 power split between electric and petrol. Thanks to this shift, Honda came back to F1, and Ford, Audi, and General Motors are all making a comeback to the sport.
With all that said, teams need to allocate $95 million to their budget for power units, which was an initial number set in 2023, and it has been increased yearly based on inflation. Also, new manufacturers got a $10 million boost in order to catch up to the leaders in terms of engine development. That number was now reduced to $5 million, considering that the requirement for new power units has been around for more than a few years now.
Today, with all of the inflation and the necessary developmental boosts, the number that teams can spend on their power units has reached $130 million. The growth was expected and necessary to cover all of the additional costs of manufacturing, parts supply, and engine support. None of these expenditures were accounted for in the previous cap number. After the latest shareholders’ meeting, the cap has now moved up to $190 million based on inflation and the team’s needs. As in all other sports, teams are not allowed to go over the cap, and with the way the race to have the best engine goes, they are struggling even at $190 million not to go all out in their chase for perfection.
So, while running an F1 team is not cheap, and F1 engine costs are probably way more than anything you’ve expected, it’s not everything that goes into competing and winning in Formula 1. Here’s how much an F1 car costs.
How Much Do F1 Cars Cost?
This is where things get interesting. No team willingly releases this information. Based on the 2026 specifications of Formula 1 cars, one vehicle costs in excess between $15 million and $22 million. This is the cost to build one, but we repeat, this data has not been made official either by the FIA or any of the teams from the F1 paddock. Based on the info that we provided about the cost cap, you need to know that developing a car, upgrading it, and producing a brand new vehicle is only one part of the cap a team can spend during a single season. From the price we stated, it is estimated that the F1 engine cost on its own is somewhere between $8m and $11 million.
While the price is an estimate and it is hard to round up a figure, the known fact is that the price has gone up significantly compared to the previous seasons. Of course, this spike in cost is associated with the biggest regulation change the sport has seen in the past ten years. New bolids are required to be (compared to their predecessors) 200mm shorter in wheelbase, 100mm narrower on the floor, and lighter by some 40 grams. Of course, the power unit has been reworked so much that the cost of making this brand new vehicle has gone up significantly.
As we said, the power unit is the highest cost as far as the price of an entire F1 bolide goes. Yet, while costing less, other parts are not cheap by any means. The chassis is a monocoque, carbon fibre, fitted for speed, and its price ranges between $700,000 and $1.2 million. Creating a Formula 1 race car is an art in itself, as it requires creating a rigid shell to protect the driver, but one light enough for F1 top speeds. The gearbox is a tale of its own, as it is required for it to be used throughout the season, and it needs to be done at a cost ranging from $450,000 to $600,000.
Each F1 car has plenty of moving parts, all of which come at a price. The front wing, one of the parts of a car that suffers the most during races, costs around $300,000 for some cars, while even the low-end ones are around $150,000. The rear one is cheaper, but it is also estimated to be between $85,000 and $150,000. We could go on and on about what else can go into the cost of an F1 race car, but we have given you an estimated price, and it is not a small one, and it is a big part of the cap cost for all Formula 1 teams.
Having an F1 team is a luxury that very few can afford. Yet, those who can don’t do it for the money alone. It is all about the passion required to build a new car from scratch, putting a driver behind the wheel, and getting the best out of both, while simultaneously competing with other people equally as passionate about it as you. This passion is recognized by the fans, who are flooding each racetrack for every race, considering that the calendar of F1 races is both limited and spread all over the world. Also, with this much money on the table every race weekend, it’s not surprising that the growing interest in F1 betting online continues to expand into the global reach.
With all of this said, you’d think that all the cost associated with Formula 1 is associated with teams running the show. But that’s only a part of the equation. There’s also a small matter of the cost that circuits have for hosting F1 races.
How Much Do Circuits Pay to Host F1 Races?
Another not-so-cheap aspect of Formula 1 racing. Each F1 race is paid in the millions by the host. It is a privilege above all else for the host to have the honour of hosting a Grand Prix weekend. All of the GP weekends are the main source of income for F1. While it might sound pricey to host an F1 race, for all the hosts it makes sense. In a way, they’re eager to pay to have the F1 caravan in their city or a region.
First in line of expenses for the host is a Formula is the annual hosting fee. This is a fee paid to F1 to bring the show to the city. We’re talking about multi-year deals between Formula 1 and the circuit. The fee is not set in stone, but it has a 5% yearly increase that runs through the signed deal, before the renegotiation comes. Tens of millions invested in hosting a race bring the full power of the F1 brand. The hosts receive the race, training, qualifications, drivers and teams, F1 branding, and global media attention. Ticket sales, concessions, and local sponsorships increase drastically for the circuit that hosts F1 races.
On average, Grand Prix hosting fees are in the region of $30 million per year. Based on the calendar alone and these fees, F1 rakes up more than $700 million solely from the hosting fees. Thanks to this, F1 can improve the competition and set the record prizes for teams participating. While we cited a rough estimate of just how much it costs to hold an F1 race, this number will grow in the future.
We can already know this, because in a matter of days, we are going to have a new race on the calendar, and it is the Spanish Grand Prix in Madrid. The Spanish capital has signed a ten-year deal with Formula 1 to hold a yearly race up until 2035. Because of this, we can tell that when each of the old circuits renegotiates their deals, they will have to pay more. For the ten-year privilege to be the home of the Spanish Grand Prix, Madrid has paid almost $500 million.
Next year, Spain will have two races, as Circuit de Catalunya has one more year on its deal. Madrid wants to take F1 one by storm, and the race formerly known as Ifema Madrid Circuit is now called Madring, as promoters believe that the new name will resonate better with the new generation of F1 fans. As far as Spain goes, it would appear that the rivalry between Madrid and Barcelona is now prepared to move beyond football and basketball, and move into F1 racing.
The track in Madrid is a hybrid one, and it will run 1.5km of its 5.5km length through the streets of the Spanish capital. Behind the idea stands Dromo, the same creator of Zandvoort in the Netherlands and Sepang in Malaysia. As much as F1 is pricey in all of its aspects, its end product on the ten circuit is like none other, and for us fans, it is worth every penny.