Before the cost cap was brought in, Formula 1 teams could spend as much money as they wanted. This gave a big advantage to the richest teams and left smaller ones struggling to keep up. The gap between the fastest and slowest cars was often huge, which made the racing less exciting.

To make the sport fairer, F1 introduced a cost cap in 2021. Teams were limited to spending $145 million a year on most areas of the team, like car development and operations. Some things like driver salaries, marketing, travel, and sick leave were not included. The aim was to close the gap and make the competition tighter.

Since then, the cost cap has worked well in many ways. The gap between the top and bottom teams has become smaller, and most teams now stick to the rules. Red Bull famously broke the limit in 2021 and got a fine and a penalty, but other teams have followed the cap more closely. For 2025, the limit is set at $140.4 million.

But now, FIA president Mohammed Ben Sulayem has said the cost cap might no longer be worth it. “I’m looking at the cost cap and it’s just giving the FIA a headache,” he told the Associated Press. “So what’s the point of it? I don’t see the point. I really don’t.”

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He also supported a proposal by McLaren CEO Zak Brown. Brown said that if a team accuses another of breaking the rules, they should have to make a formal protest and pay a deposit. If the claim is true, they get the money back. If it’s false, the money is lost and counted in the cost cap. “You can’t just accuse someone without a written protest. You must pay money for that protest,” said Ben Sulayem, adding he could imagine a fee of around $50,000.

These comments came after tension between Red Bull and McLaren. Red Bull suggested McLaren might be cooling their tyres with water, but no evidence was found. Pirelli, the tyre supplier, also said such a trick would be nearly impossible without being noticed.

While the cost cap has helped balance the field and made teams more financially stable, getting rid of it could start a new spending war. Top teams might chase big performance gains again, and smaller teams could be left behind. For now, it’s not clear what will happen next.