Cadillac F1 team find FIA budget cap loophole

Photo: © IMAGO

F1 News & Gossip

F1 team find FIA budget cap loophole

Cadillac are set to join the F1 grid in 2026

Sam Cook Digital Journalist

Sports Journalist who has been covering motorsport since 2023

Monday 6 October 2025 10:57

Sky Sports pundit Ted Kravitz spoke of a potential loophole that an F1 team have found in the FIA budget cap rules.

All F1 teams are bound by the budget cap, meaning they cannot overspend on things such as upgrades to their cars, recruiting staff and travel and logistical expenditure. Driver wages are not included in the budget cap, which was brought in for the 2021 season.

Since its introduction, Red Bull have been caught out by it, with a 2021 overspending resulting in a hefty fine and reduced wind tunnel time for the 2022 season.

Article continues under video

Now, there is one team that are using a loophole in the regulations in order to recruit top names from other teams ready for the 2026 season.

Cadillac - who are joining the grid in 2026 - are attempting to piece together a strong behind-the-scenes team to go along with team principal Graeme Lowdon and driver signings Valtteri Bottas, Sergio Perez and Colton Herta.

Kravitz took to his Notebook show at the Singapore Grand Prix to explain a loophole in the FIA budget cap rules which may allow Cadillac to build their team of expertise without impacting their 2026 budget.

"Steve Nielsen had a couple of interesting things to say yesterday," Kravitz said about the Alpine boss' press conference at the Marina Bay Street Circuit.

"He was talking about losing a lot of staff to Cadillac and he was saying it is just part of the usual moving around of crew with a budget cap.

"There’s been less of that movement recently with Cadillac coming in and recruiting a lot of people, they can offer people some quite good packages financially.

"Because while they are still under budget cap, they’re not spending anything at the moment because they are not going racing.

"So they can spend stuff on attracting staff, because they are not actually spending anything on going racing at the moment, even though as a new entrant Cadillac are subject to the budget restrictions like everyone else."

Where will Cadillac be in 2026 order?

Despite having signed two F1 legends in Perez and Bottas - who have an impressive 16 grands prix victories between them - team principal Lowdon has already admitted that he expects the team to be last in the pecking order in 2026.

They have a new state-of-the-art facility near Silverstone, and have been preparing for the 2026 season for a lot longer than their rivals, but it's likely going to be tough going in the first few years of their F1 journey.

In 2028, however, they are set to start a power unit partnership with General Motors, and that is likely when they will want to start being competitive with their rivals, challenging for points and cementing themselves as an F1 outfit.

For the first two seasons, Cadillac have signed a deal with Ferrari to use their power units in 2026 and 2027, and Lowdon recently described how he has called for patience among the board of directors at Cadillac.

F1 HEADLINES: Hamilton demoted as controversial incident prompts rule rethink

F1 RESULTS: Oscar Piastri FUMES as controversial Lando Norris incident overshadows title celebrations