Formula 1 has revealed how it plans to lower costs forꦉ teams heading in🔴to the 2021 season, including the introduction of a $175m cost cap.

F1’s overhaul of the technical and sporting regulation for 2021 was unanimously approveꦏd by The Wꦑorld Motor Sport Council on Thursday ahead of this weekend’s United States Grand Prix, including a new financial structure.

Reducing running cost꧂s in a bit to create a 🐽more level playing field among teams was one of F1’s main priorities for its post-2020 vision, and the new financial changes are expected to “promote the competitive balance and the sporting fairness of the championship”.

F1 says the changes will “ensure the🐽 long-term financial stability and sustainability of the F1 teams while preserving the unique technology and engineeriꦉng challenge of F1”.

The most notable change is the introduction of a $꧟175m cost cap for a 21-ra൩ce calendar, with an additional £1m added or deducted for each race above or below 21 races.

F1’s main guiding p♛rinciples for the cost cap are as follows:

- Cost cap level set at a level that facilitate reduction in performance differentials maintaining unique technology and e🧜ngineering challenge of F1

- Ensure free🧸dom to spend f꧅or the F1 teams within Cost Cap limit

- Ensure transparency, fairness and equality of treatment amongst all competitꩵor🍸s

- Ensure realistic implementation timescale to enable F1 teams t🎃o adjust operating structures and reporting proce♏sses

- Reference to internationally r𝄹ecognised accounting, acting standards and best practices

The cost cap will be implemented over a three-year timeline set out by F1. On June 30 2020, teams will have the option to submit their financial da✤te for 2019 on a voluntary basis🐽, before a soft implementation in 2021.

Teams can 🐭also voluntarily submit their 2020 financial data by March 31 2021 without application of any financial or sporting penalties, before the first year of mandatory implementation comes into force a year later.

F1 motorsport boss Ross Brawn described the changes as a “turℱning point” for the sport and confirmed any breach of the fina🧔ncial regulations will have “serious and severe” consequences.

So🔴me of the most relevant exclusions to the cost cap include driver costs, marketing costs, non F1 activity costs, year end bonuses and the three highest paid persons per team costs.