© Steve Etherington for Mercedes-Benz Grand Prix Ltd.
With the Formula 1 budget cap being implemented in 2021, the Mercedes F1 Team looks to be on the brink of profitability, however, not on the engine side.
Mercedes has one of the largest budgets in Formula 1, which makes it hard to become profitable. However, with a $145 million budget cap that will be introduced in 2021 and gradually further reduced in the next few years, the team can be looking at turning a profit.
Daimler Chairman of the Board of Management Ola Källenius believes this is realistic on the team side of things, however not on the power unit side.
“The economical proposition of Formula 1 is improving and with the cost cap coming in and turning the team into something that can actually start producing cash flow as opposed to consuming cash flow is very real, it feels tangible,” explained the Swede.
“On the powertrain side that is not yet the case.”
Despite having one of the largest budgets, Källenius says Mercedes has been one of the loudest voices when it comes to cost reduction in Formula 1.
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“Mercedes has also been one of the drivers, even if we are one of the big teams from a gross point of view, a bigger budget.
“We are one of the ones that say ‘Let’s stay sensible’, and I have also been an active advocate for reducing cost and keeping things sensible.
“We are not yet at a plus-minus zero from an overall point of view, but if you look at the media value and the technical value that we get out of this sport, and I look at how little we actually spend net, it is already today a very attractive proposition and it is going to get better still.”
Mercedes team principal Toto Wolff also believes the cost cap will make Formula 1 more attractive for Daimler and other manufacturers.
“With the cost cap coming in, the business case has changed completely for us,” the Austrian said.
“We still need to subsidise the power unit department and the power unit company so this is something we need to look at in the future, but definitely we are looking at a very positive future for Formula 1 as a sports franchise.”
