How does cost cap take account of accident costs?

[El Scorchio]

So essentially if a Haas, for example, wipes out Verstappen and completely wrecks his chassis through no fault of his own, then Red Bull are heavily financially penalised. That seems very unfair.

I'm sure Wolff is just making a bit of a meal of it to prove a point about the budget cap, and the actual impact will be negligible, but this does seem a bit ill thought out as a rule.

Ideally you would want that teams can always make new parts, provided they are identical to the previous iteration, without the cap. But yeah, the world is not ideal in that sense. I don't really see an easy way out.

Me either- it's very complex. I agree though- some sort of amnesty/zero count on cost of identical replacement parts would seem on the face of it a sensible way.

[DChemTech]

So essentially if a Haas, for example, wipes out Verstappen and completely wrecks his chassis through no fault of his own, then Red Bull are heavily financially penalised. That seems very unfair.

I'm sure Wolff is just making a bit of a meal of it to prove a point about the budget cap, and the actual impact will be negligible, but this does seem a bit ill thought out as a rule.

Ideally you would want that teams can always make new parts, provided they are identical to the previous iteration, without the cap. But yeah, the world is not ideal in that sense. I don't really see an easy way out.

Me either- it's very complex. I agree though- some sort of amnesty/zero count on cost of identical replacement parts would seem on the face of it a sensible way.

The other way that comes to mind is to just force-freeze development once the team hits the cost gap and from that moment allow identical copies only. That means theoretically they can spend all budget pre-season to maximize their development budget, and rely only on 'above-budget' repairs, but then they cannot change anything. Or, they can opt to stop a few million short of the budget in development, and still improve throughout the season until the cap is hit. That may allow for some interesting dynamics...

And it also means teams will need to have a quite clear view on how frequently they expect their driver to trash it, if they want to keep developing.

[El Scorchio]

Ideally you would want that teams can always make new parts, provided they are identical to the previous iteration, without the cap. But yeah, the world is not ideal in that sense. I don't really see an easy way out.

Me either- it's very complex. I agree though- some sort of amnesty/zero count on cost of identical replacement parts would seem on the face of it a sensible way.

The other way that comes to mind is to just force-freeze development once the team hits the cost gap and from that moment allow identical copies only. That means theoretically they can spend all budget pre-season to maximize their development budget, and rely only on 'above-budget' repairs, but then they cannot change anything. Or, they can opt to stop a few million short of the budget in development, and still improve throughout the season until the cap is hit. That may allow for some interesting dynamics...

And it also means teams will need to have a quite clear view on how frequently they expect their driver to trash it, if they want to keep developing.

Again though, that's just punishing teams for things which happen beyond their control. You don't want championships decided one year- with ramifications possibly running into future years from hindered development- just because of random acts of bad luck. It's pretty rare a driver will just total a car by themselves without any outside factors.

[DChemTech]

Me either- it's very complex. I agree though- some sort of amnesty/zero count on cost of identical replacement parts would seem on the face of it a sensible way.

The other way that comes to mind is to just force-freeze development once the team hits the cost gap and from that moment allow identical copies only. That means theoretically they can spend all budget pre-season to maximize their development budget, and rely only on 'above-budget' repairs, but then they cannot change anything. Or, they can opt to stop a few million short of the budget in development, and still improve throughout the season until the cap is hit. That may allow for some interesting dynamics...

And it also means teams will need to have a quite clear view on how frequently they expect their driver to trash it, if they want to keep developing.

Again though, that's just punishing teams for things which happen beyond their control. You don't want championships decided one year- with ramifications possibly running into future years from hindered development- just because of random acts of bad luck. It's pretty rare a driver will just total a car by themselves without any outside factors.

It is. Or at least, it is asking teams to take place a bet on how frequently they expect incidents to occur, given their drivers, field position, tracks and main competitors. But yeah, that's all probabilities - some will have luck and beat the odds, others will be hit harder. Luck is a big factor, unfortunately.

[SiLo]

Incident costs should be recorded but not included in the budget cap IMO. It's not something you can control and teams should not be penalised for trying to push the cars to the limit.

[El Scorchio]

The other way that comes to mind is to just force-freeze development once the team hits the cost gap and from that moment allow identical copies only. That means theoretically they can spend all budget pre-season to maximize their development budget, and rely only on 'above-budget' repairs, but then they cannot change anything. Or, they can opt to stop a few million short of the budget in development, and still improve throughout the season until the cap is hit. That may allow for some interesting dynamics...

And it also means teams will need to have a quite clear view on how frequently they expect their driver to trash it, if they want to keep developing.

Again though, that's just punishing teams for things which happen beyond their control. You don't want championships decided one year- with ramifications possibly running into future years from hindered development- just because of random acts of bad luck. It's pretty rare a driver will just total a car by themselves without any outside factors.

It is. Or at least, it is asking teams to take place a bet on how frequently they expect incidents to occur, given their drivers, field position, tracks and main competitors. But yeah, that's all probabilities - some will have luck and beat the odds, others will be hit harder. Luck is a big factor, unfortunately.

There's no way development possibilities should come down to luck based on the chaos of races. It can all be totally avoided by just saying like for like replacement parts don't count against the cap.

[Big Tea]

I wonder how many races parts that usually get damaged run anyway? Without counting minor upgrades etc, they have to have a stack of parts following the car and some at 'base', many of which may never get used anyway. As a way to recoup some money, they probably build cars and sell/present them out of the 'unused' spares at year end anyway

[Jolle]

I wonder how many races parts that usually get damaged run anyway? Without counting minor upgrades etc, they have to have a stack of parts following the car and some at 'base', many of which may never get used anyway. As a way to recoup some money, they probably build cars and sell/present them out of the 'unused' spares at year end anyway

Income from selling stuff, just like sponsor income is outside the spending cap.

[Gaz.]

I think people wildly overestimate the cost of accidents. Given that the workforce would be 100% utilised whether a crash or not (and thus paid) the delta on a crash is the materials cost. I think in the media the also report big numbers which include the labour.

Or that's my intuition anyway. Perhaps some insiders can clarify?

The teams don't have 500 people working three shifts 24/7, they have reduced staffing overnight so a new tub will be paid out of overtime (and I doubt it's flat rate) so if a tub takes 6 weeks to make from first lay up to fully dressed then it creates a huge overtime bill. The often quoted £20k for a front wing probably is guff as the staff are there already and they expect to make 4 per car for each iteration anyway and front wings are a common loss, but how often does a tub need replacing? They have a spare one but once that goes into the race pool they'll need to make a new spare. It was a very expensive crash, especially early in the seasons, if it was the penultimate race the team may take a chance and not make any more spares, such as Haas not making a spare tub for the last two races of 2020.

[Hoffman900]

I think people wildly overestimate the cost of accidents. Given that the workforce would be 100% utilised whether a crash or not (and thus paid) the delta on a crash is the materials cost. I think in the media the also report big numbers which include the labour.

Or that's my intuition anyway. Perhaps some insiders can clarify?

The teams don't have 500 people working three shifts 24/7, they have reduced staffing overnight so a new tub will be paid out of overtime (and I doubt it's flat rate) so if a tub takes 6 weeks to make from first lay up to fully dressed then it creates a huge overtime bill. The often quoted £20k for a front wing probably is guff as the staff are there already and they expect to make 4 per car for each iteration anyway and front wings are a common loss, but how often does a tub need replacing? They have a spare one but once that goes into the race pool they'll need to make a new spare. It was a very expensive crash, especially early in the seasons, if it was the penultimate race the team may take a chance and not make any more spares, such as Haas not making a spare tub for the last two races of 2020.

Exactly.

Man hours are billed towards the cost cap. These are businesses. I'm assuming the billable rate includes fringe benefits (may be a perk of being in the UK as opposed as the US, where someone making $70hr has a billable rate of $140 when factoring in everything else). This is assuming it's all in house, which it likely isn't.

In addition to the tub, there is also the shock the driveline takes. Take things spinning very quickly and give them a sudden jolt, and things do and can come together.