Jaguar and Nissan Formula E teams have become the first to be penalized for breaching Formula E’s cost cap regulations, marking a significant moment in the championship’s financial governance. Both teams exceeded the cost cap during the 2023 season, resulting in fines and testing penalties from the FIA, but questions linger about the broader implications for the sport.
The FIA’s financial review, covering the 2022-23 season, found that Nissan overspent by 1.96%, amounting to €269,252, while Jaguar breached the cap by 0.6%, a €73,849 violation. Nissan faces a €300,000 fine, while Jaguar will pay €100,000. Both teams will also sit out the first half-day of testing at Valencia next month as part of their punishment.
The penalties come after the teams accepted an ‘Accepted Breach Agreement’ (ABA), a mechanism designed to settle financial rule violations, similar to Red Bull Racing’s case in Formula 1 last year. The FIA noted that both teams cooperated fully with the review process and that there was no indication of bad faith or fraudulent intent.
Why the Breach Happened
Nissan attributed their overspend to the team’s organizational restructuring as they transitioned to managing their Formula E program in-house after previously working with e.dams. In their statement, Nissan highlighted how the process of adapting to the new financial regulations, combined with internal changes, led to unintentional oversights.
Jaguar, meanwhile, acknowledged that a filing error led to their minor breach. The team clarified that if the paperwork had been submitted correctly, they would have been compliant with the cap.
The Penalties: Soft or Harsh?
Although the financial penalties are significant, the three-hour testing ban is not expected to severely hamper either team’s preparation for the new season. With 20 allocated manufacturer test days, both teams can absorb the loss without major disruptions. Still, some may view the penalty as harsh, given the context of the challenging Gen3 era, which saw multiple issues with car components like brakes and batteries, leading to unexpected costs.
A Struggling Gen3 Era and Its Impact
The 2023 Formula E season, the first under the new Gen3 regulations, was marred by technical difficulties. Teams faced frequent disruptions, and parts supply issues increased operational costs. Nissan’s scattered operations during this transition contributed to their overspend, while Jaguar dealt with substantial accident damage, including two major crashes involving Sam Bird.
With these external factors in play, some argue that the penalties might have been softer given the exceptional challenges of the season. Additionally, many believe that the FIA’s nearly year-long delay in reaching a decision points to potential shortcomings in the cost cap auditing process.
Future Implications for Formula E
The question now is whether these penalties will deter future manufacturers from joining Formula E. Despite these first breaches, Formula E remains relatively cost-effective compared to other global motorsport championships. However, as the sport heads into the Gen4 era in 2026, discussions are already underway about adjusting the cost cap to attract more manufacturers.
For now, Nissan and Jaguar will have to accept the consequences of their minor infractions. Still, the FIA and Formula E teams alike will need to reflect on how these first financial breaches are handled, ensuring that the regulations evolve effectively to maintain the championship’s competitive and financial integrity.
