Mercedes' loss of financial power "a huge challenge"

Mercedes technical director James Allison has described the adaption to Formula 1's new budget cap as "a huge challenge" for the team.

Courtesy of the might of automotive giant Daimler and the continued success of its F1 team, Mercedes has operated on one of the largest budgets on the grid in recent years.

But in a bid to increase competition up and down the pit lane, as well as to safeguard teams from overspending to bridge the gap to those at the front, F1 has introduced its first budget cap.

With the figure set at $145million for this year, dropping to $140m for next season and $135m for 2023-2025, Mercedes has been forced to make considerable changes to meet this new regulation.

Describing this year as "big for the entire sport", Allison said: "It’s the first year of the new financial regulations, the so-called cost cap.

"A set of regulations that forces the budgets of the big teams down to meet that of the midfield, and where we all basically have the same financial firepower to go about prosecuting the championship.

"That has been a very interesting change here inside Mercedes, because we are one of the bigger teams in Formula One and so we had to figure out how we can operate our championship assault with far less financial resource than we might have had previously.

"This means figuring out how we can make components on our car to last longer, how to build them more cheaply and how to make sure we maintain the same sort of performance that we did previously, despite the fact that our overall budget has come down. It’s a huge challenge and building the car is only part of it."

As well as navigating the current season on a reduced budget, the 10 teams face the added challenge of developing cars for 2022 that adhere to an entirely new set of aerodynamic regulations.

These changes are already under "very serious" consideration by Mercedes, although when the team completely switches focus to next year will be dictated by the performance levels seen in the opening races of the season.

Allison claims Mercedes' concerns will be eased by a fast start to what is a record-breaking 23-race campaign that commences in Bahrain at the end of March.

"Probably the biggest weapon we could possibly have to attack these new financial regulations in a good way would be to launch with a car that is fast from the beginning because a car that is fast from the beginning is going to be cheaper to stay quick during the whole season," assessed Allison.

"So, let’s hope that we’ve put enough goodness into the car at the beginning of the year, to allow our plans to unfold in a way that sees us operating at a high level under this new constraint, where we are fighting with exactly the same guns as everybody else."

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