‘We will go over’: Binotto warns Ferrari and other teams will exceed budget cap

The budget cap was reduced by a further $5 million this season.

Ferrari team principal Mattia Binotto believes that it will be impossible for the teams to stick to the circa $140 million budget cap due to inflation.

The spending cap was lowered by a further $5 million this season as part of the new technical regulations, and it was lowered again to reflect the fact that there will be no replacement for the Russian Grand Prix this season.

The money is to be split between development, damage repair, freight and more, and Red Bull are said to have gone through $6 million of the $36 million they have set aside for development of their RB18.

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Binotto previously speculated that his rivals would have to “stop developing” due to the money they have already spent on the upgrades that boosted Max Verstappen to three of his four wins in 2022.

Red Bull boss Christian Horner has warned that some additional funds should be made available for transporting goods given the increase in prices, and Binotto tends to agree.

“I think that there will be no way for us to stay below, so I am pretty sure at some stage we will go over,” he warned.

“In the regulations, there is a threshold which is 5%, and if you do not exceed the 5% on top of what’s the budget cap threshold, it could be considered a minor breach.

“How will they decide on that in terms of penalty, I have no idea.

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“I don’t think there is any way for us and for many teams to stay within, and even laying off people I don’t think that’s the right choice.

“It’s already summertime, and the benefit is not sufficient to cope with the excessive prices and cost. So what will be the implications?

“What will be the most important is many teams will breach it and I think that will be simply bad for the financial regulations.

“If we are breaching the financial regulations, then I think we will start debating if the financial regulations are working, and it will put everything back in discussion.”

Horner adds that bigger teams on the grid will be unable to keep within the confines of the financial restrictions, and predicts that there will be further contention as to what punishment is handed out depending on how far over the spending cap teams go over.

“I think all the major teams are going to breach that $140m cap this year but what is the penalty for a minor breach?” he queried.

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“What we don’t want to do is end up is playing a game of chicken as to say, do you go for 4.9% over, do we go for 4.7%? And that could be one upgrade: that could be the differentiating factor of this world championship.

“I think what we do need is clarity and clarity quickly. Because quite simply, it’s not right we should be held to ransom by a couple of teams who aren’t perhaps affected. That was never the design of the budget cap.

“The budget cap was there to limit the top teams from a spending frenzy.

“None of us could predict when we came up with the budget cap figures, which if you remember, were reduced by $30 million where they were originally set during the pandemic, the world events that are driving inflation.”

Alfa Romeo boss Frederic Vasseur rubbished the suggestions, explaining that inflation is a “normal process” and that teams should “shut down their wind tunnel” to save on energy bills.