The cost-saving push that F1 fans will want to hear

Reducing costs for all Formula 1 teams through standardisation of parts is one of the key strategies currently being pursued by Liberty Media and the FIA for 2021 and beyond.

In recent weeks, a raft of 'Invitations to Tender' have been posted on the FIA website, covering various areas of the future F1 car, which indicates that a serious effort is being made to address costs. And yet the first and most significant tender, for the supply of gearbox cassettes, has already been abandoned. Teams will therefore continue to have a free choice of either making their own complete gearboxes, or buying them in from a partner.

The second batch of 2021-24 tenders includes wheel rims, brake friction material, and the brake system (brake-by-wire, callipers and master cylinder). The deadline for bidders was May 22, and a result promised is by June 14 - the date of the next World Motor Sport Council Meeting. That was followed by a tender for fuel system elements, including pumps and pipes, which remains open until June 15 and with a result due on July 14. More tender requests, for less critical components, are on the way.

There's clearly a lot of momentum behind the strategy. So why was the plan for common gearbox internals abandoned? And how many of the other attempts to introduce common parts will fall by the wayside in the coming weeks?

The push for standardisation is inextricably tied to efforts to improve competition in 2021 and beyond, as Ross Brawn made clear earlier this year: "We've got a division one and division two at the moment, and we need to stop that, we need to have a much closer performance gap between the teams, and the cost control will be part of that - the regulations that are evolving will be part of that."

As is the case with other aspects of planning for the 2021 rules, there's close collaboration between the FIA and the team of engineers Brawn has engaged to shape the regulations, headed by Pat Symonds. But the man with ultimate responsibility for the new rules is Nikolas Tombazis, the FIA's head of single-seater technical matters.

Tombazis (pictured below when at Ferrari in 2013) echoes Brawn by stressing that the emphasis is on parts that aren't of interest to fans.

"One of our major objectives for 2021 is to reduce costs," he says. "And we want to achieve that with a number of different measures, both financial regulations and also on the technical regulations.

"If we just said we'd cut 50% off every single item then we'd worry that we would create a) an unmanageable situation, we would reduce the cost too much in areas that arguably cannot be reduced. And b) it would perhaps then dumb down F1 to a point where it's not as exciting technologically.

"Having excluded that possibility, then we need to select certain areas to make more big savings, and maybe leave other areas alone, or with smaller savings.

Every avenue has been explored in an attempt to rein in costs

"On the technical side of the car, we have selected which areas we feel are the real battlegrounds of technology between competitors, where they can really make a difference, and we want to promote differentiation there. And areas where maybe technologies have converged more or less, and there's a lot of expenditure on certain things, but maybe everyone does almost the same thing, but nonetheless spends a lot of money.

"So we've identified these areas, and said OK these are the areas which can be standardised without throwing [out] the baby with the bath water. And thus enabling us to leave other areas more technologically exciting."

There's more than one way of approaching that challenge, as Tombazis explains: "Once a component is identified to fall into this broad category, it can be either a standard component, or a prescribed component, the two things are not exactly the same.

"A standard component is something where we have to launch a tender, and we make a specification - we want it to be this or that way.

"Suppliers would make a bid, and they would say 'we can supply this component for so much money in a year', and give us a full technical and financial description of what they are proposing. And on that basis we have to make a proposal, and the decision to select such a bidder.

"The alternative is to make a component be prescribed - meaning that the FIA issues a drawing for something, with full specification of dimensions, tolerances, materials, surface finishes, every single aspect. And then competitors can either make it in-house or with an external supplier or even sell it to another competitor.

"Other components can either remain in the team IP, and be the areas of real performance differentiation between cars, or there may be some components that can be transferred between companies within certain financial provisions."

Tombazis makes it clear that every avenue has been explored in an attempt to rein in costs.

"We've gone through every single aspect of the car, every single component, and in the cost saving of some cases we've concluded the best way to deal with it is a standard component, or standard design.

"In other cases we are acting on the regulations. For example, certain components may have a minimum weight imposed, in order to avoid an absolute perfect material being used, or minimum thickness, or certain things like that, technical constraints which will enable certain madness to be limited."

The tender process is to some degree a fishing exercise. The FIA may believe that a standard supply of a particular part would be cheaper than what teams spend now, but it doesn't know for sure until the bids come in and are studied. On top of that, the bids must be technically compliant.

"The potential outcome once all the bids are through is that we may decide that a component does not go ahead as a standard component," says Tombazis, "Because we feel that we don't have a bid that fully satisfies our requests. And that can either be because of it failing to achieve technically what we want, or maybe because it's not saving any money, or both, or whatever.

"So launching a tender doesn't automatically means that there's going to be one approved."

That's what happened with the gearbox tender. There were four bids and only Xtrac was publicly acknowledged by the bidder. At least one of the others involved a current F1 team.

The FIA has been able to use the tender process to extract an unprecedented amount of information about how the teams design, develop and operate their gearboxes

After due consideration, Tombazis and his colleagues decided not to award the tender, and the process was formally 'closed' via a recommendation to the World Motor Sport Council. That decision was arrived at with the help of the teams, who supplied information about how much gearboxes cost, and so on.

In the cases of Alfa Romeo, Haas and Racing Point they could detail how much they currently pay their suppliers for a complete gearbox, and how much of that total reflects the cassette element. For the other teams, who make their own gearboxes, it was a question of their R&D and production costs.

On top of the cost element, teams questioned the principle of an item as significant as the gearbox becoming a standard part, and many expressed doubts about reliability. That was made clear in an FIA statement explaining the decision, which read: "The technical data provided revealed that gearbox technology in F1 has largely converged and that, as a result, there is little performance differentiation at present.

"It was also noted that, due to the complexity of the components, gearboxes remain a sensitive matter in terms of reliability, and this was factored into the evaluations of the FIA technical department."

The same statement included a point about costs - making it clear that after it studied the data supplied by both the teams and the bidders, the FIA will now find other ways to trim spending on gearboxes: "These methods are being discussed with the F1 teams and will be included in the regulatory package to be presented by the end of June."

That's an intriguing suggestion. In effect the FIA has been able to use the tender process to extract an unprecedented amount of information about how the teams design, develop and operate their gearboxes. It can now use that data to frame the rules in order to attack costs, for example by specifying minimum weights or controlling the use of exotic materials, or perhaps by restricting in-season development.

The complication is that teams operate in different ways. Those that currently buy gearboxes have a very different approach to those that make them, and that applies in other areas of the car too.

"You could argue that they've got 10 different business models," says Tombazis. "So therefore it's impossible to get everyone to say the same thing and agree. Hopefully the balance will be that we are doing something reasonably sensible, but we're never going to find unanimity on all these matters.

"We discuss some of these things in the Strategy Group, but we don't have a vote between the teams, whether they want or not a tender, but we do discuss these things, and get their feedback. And obviously some people are happy, some people are less happy."

But gearboxes are such a key element, and, because of the team business models being so different, it was perhaps inevitable that it wouldn't go through.

"Common sense prevailed," says Racing Point technical director Andy Green, pictured below. "It's good to try, I think there are lots of areas where they can make cost savings, but there are some areas where they have to tread really carefully.

"We need to see aero regs on wheels, because if they have covers over them, you won't see them, so I don't mind that one. I'm talking about areas that are more linked to reliability than anything else - they have the potential to stop the whole grid. Fuel systems are incredibly complicated. We spend a lot of time making these things reliable, and they think that they can just roll up with a standard fuel system. We could end up with a situation where it stops the whole grid.

"Again, the amount of effort and work we put in to making brakes reliable - of all the primary functions of an F1 car stopping is the biggest one!"

Green reckons that it might be better to hold fire on some standard elements: "I just think the timescale they've got to do it in is ambitious, so I think they can try, but if some of them don't happen in 2021, then keep on going and try it in '22. There's no reason why you can't keep delivering it piecemeal."

"A lot of the stuff that we want to do means that we want cars to look different" Nikolas Tombazis

As a team with no shortage of resources, Mercedes has less to gain than most from any attempt at cost cutting. Team boss Toto Wolff still sees the bigger picture - albeit with some limitations.

"In non-performance parts, where we're really able to save a lot of money, then we should aim for that," says Wolff. "But if there is no saving - just complexity, risk of reliability and failure - we shouldn't be following those rules.

"With the basic principle, I'm on board. [But] we have the question that if somebody else is in-between - an independent supplier - the company would need to make a margin, produce a product cheaper than us [with] the same specifications, and then it sounds like a little bit of a tricky endeavour."

Wolff makes a key point. Any bidder must name its price, stick to it for four years, and find a way to make a profit.

Teams pour huge resources into the design process, production and, especially, quality control to ensure reliable parts for just two cars. So, what of an outside supplier that has to supply 20 cars to the same exacting standards, and yet also keep its costs down? It's something that simply doesn't compute to most teams.

Naturally there's also some resistance to the idea of being obliged to buy parts from a rival, or even the sister company of a rival, that wins a tender. The precedent for that is the McLaren ECU, which generated some concerns at the time but soon came to be accepted.

"[The ECU] has been a success," says Tombazis. "People were complaining about it then, but I don't think anyone would dream of going back to free development of an ECU. Some people are resistant to change then they come to appreciate the usefulness of certain things."

The ECU was a special case in that it plays a key role in the FIA policing F1, and there's also an element of that thinking with the current fuel system tender. This notes: "Fuel flow limitation enforcement is key to the fairness of the competition, and common fuel system components shall contribute to a fair regulation of the competition by the FIA."

That gives the FIA a special imperative to push that particular tender through, despite the reliability concerns expressed by the teams. It will be intriguing to see what happens to those involving brakes and wheel rims, both of which have stirred opposition.

But the good news for F1 fans is that it's all being done for the right reasons.

"A lot of the stuff that we want to do means that we want cars to look different," says Tombazis. "We want the cars to remain distinct, and not be the same. We don't want to create a one-make formula.

"We don't think there's anything that the spectator would associate with the feeling, 'Oh dear, that's spoiling F1.' We've selected things which we think are good low-hanging fruit, but not detracting from the technological sport which we want it to be."