Christian Horner believes Formula 1 needs to rethink its cost cap, arguing that teams are already spending between $500 million and $600 million a year despite the financial restrictions introduced to control costs and improve competition.
The former Red Bull team principal has called for the spending limit to be raised, although he also acknowledges that the regulations have made teams more efficient and helped smaller operations such as Haas and Williams become more financially stable.
Christian Horner questions Formula 1’s cost cap
Formula 1’s cost cap has fundamentally changed the financial management of teams since its introduction in 2021. The objective was to contain spending and promote closer competition by limiting the amount of money that teams could devote each year to designing and developing their cars.
The rules were also introduced at a particularly difficult time for the championship. The coronavirus pandemic had placed several teams under serious financial pressure, with Haas among those facing significant uncertainty over their future.
Christian Horner is particularly familiar with how the regulations work. Red Bull exceeded the spending limit in the first year of the cost cap, and the former team principal now believes the system requires a substantial rethink because overall expenditure has continued to increase.
Horner says F1 teams already spend $500m–$600m
Speaking to Autosport, Christian Horner argued that Formula 1 teams continue to spend enormous sums, even though a substantial proportion of their expenditure is subject to financial restrictions.
“Teams are already spending $500 million or $600 million, so this spending cap needs to be raised,” Christian Horner said.
“F1 teams spend all the money they have, and they’re like a balloon without enough air: if you squeeze it at one end, the air will go somewhere else. For example, into driver salaries, which are much more lucrative than before. It’s about finding the right balance.”
His argument centres on the distinction between expenditure included within the cost cap and other significant costs that teams can still incur outside it.
Although the regulations restrict certain areas of car design, development and operation, they do not place every aspect of a Formula 1 organisation’s spending under the same limit. Horner believes this encourages money to flow towards categories that remain excluded.
Former Red Bull boss also recognises benefits of the budget cap
Despite calling for changes, Christian Horner did not dismiss the positive effects of Formula 1’s financial regulations.
“The accusations made against us in the first year wouldn’t even be a problem now, given how much teams spend,” he added.
“In any case, the cost cap has brought real efficiency to teams, so accounting departments now play just as important a role as design departments in achieving success in F1.”
The former Red Bull team principal also highlighted the improvements in financial stability experienced by smaller teams.
“It has also helped teams such as Haas and Williams move higher up the standings, giving them greater value and stability. Before 2021, F1 was like a bucket full of money with a hole in the bottom: teams spent a little more than they actually had, and we saw many teams come and go.”
Horner therefore recognises that the regulations have achieved some of their original objectives, particularly by encouraging greater spending discipline and making financial management a more important part of running a competitive Formula 1 team.
How Formula 1’s cost cap increased from $145m to $215m
The cost cap has evolved considerably since it was first introduced. In 2021, the spending limit was set at $145 million, but the figure has since increased to $215 million annually for 2026.
That represents a $70 million increase compared with the original limit five years earlier.
Several factors have contributed to the evolution of the regulations, including inflation, two changes to the technical rules and Formula 1’s wider economic growth.
When the cost cap was first introduced, the championship had not yet experienced the full extent of the popularity boom that subsequently strengthened its commercial position. Teams have since gained greater financial resources, while changes to the regulations have also influenced the permitted spending limits.
The $215 million team cost cap is not the only major financial threshold in Formula 1. Power unit manufacturers are subject to a separate annual spending limit of $190 million.
Other important areas of expenditure are also treated separately, including driver salaries, remuneration for certain senior team personnel, travel costs and marketing activities.
These distinctions help explain why the total amount spent by a Formula 1 organisation can be substantially higher than the headline team cost cap.
Formula 1 faces a debate over financial control and rising expenditure
Christian Horner’s position reflects a broader question about how Formula 1 should balance financial sustainability with the commercial growth of the championship.
The cost cap has encouraged teams to operate more efficiently and helped protect their long-term stability. At the same time, the sport’s increasing revenues and the range of spending categories outside the regulations mean that overall expenditure can remain extremely high.
For Horner, the challenge is not necessarily to abandon financial restrictions, but to find a better balance between the spending that teams are permitted to undertake and the financial realities of modern Formula 1.
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