F1’s cost cap could make Mercedes race in other series

Formula 1’s reduced budget cap could prompt Mercedes to enter other racing categories from 2021 to ensure it utilises its staff and resources. 

Teams have agreed to limit the impending cap from an original figure of $175m to $145m for 2021, before it reduces by a further $5m for the following season. 

The revised cost cap means the top teams will need to significantly reduce their F1 personnel to comply with the new financial regulations. 

Ferrari F1 team principal Mattia Binotto recently revealed that the Italian manufacturer is considering entering IndyCar in order to utilise some of its staff in other programmes, and Toto Wolff says Mercedes will need to “readjust” and could follow a similar strategy.  

"First of all we're living in a financial reality that is very different to pre-COVID," Wolff explained. 

“We have accepted the lower budget cap and it is a must that successful F1 franchises earn money rather than lose money.

"For us it is also a way of making sure that Daimler not only appreciates the sporting and marketing benefits of the platform, but also to make it as cost neutral as possible. And I believe this is why we need to support such a cost cap.

"For us it means readjusting, it means changing the way we do things, and deploy personnel in new areas. We have a very strong department that is called Mercedes Benz Applied Science, where we work for high performance clients, and deploy our services.

"And who knows? Maybe we will look at other race categories in order to keep the resource, and keep the human resource and intellectual property, within Mercedes.”

But Wolff has insisted Mercedes intends to stay in F1 for the foreseeable future, having dismissed reports linking the Stuttgart marquee with an exit from the sport as “nonsense”. 

“There’s always some kind of campaign and agenda going on,” he said. “It’s clear that every automotive company faces difficult and insecure times.

"Every single day you open up a magazine or newspaper it’s about Volkswagen or Renault or FIAT or Daimler, and in that respect I completely understand that a sporting platform is being questioned.

“The top management at Mercedes very much sees Formula 1 as a core activity – we build road cars and we build race cars – and actually the first ever car was a race car. 

“And in that respect we don’t see it simply as a marketing platform that generates valuable marketing dollars but we see it as a co-exercise. There is a technology transfer between the road and Formula 1 and it’s not being criticised within Daimler.

“Nevertheless we discuss all of our activities and all of our investments every single year and I think we’re just a target of somebody that wants to create some headlines and have more clicks.”