How Does Formula One Work? Points, Pit Stops and a Budget Cap

A standard event runs over three days. Friday and Saturday morning give three practice sessions, one hour each, in which teams run through setup changes and tyre evaluation with no competitive consequence. Qualifying on Saturday afternoon sets the starting order and runs in three knockout segments: all twenty cars run in the first, the slowest five are eliminated, fifteen run in the second, five more go, and the remaining ten contest the final segment for pole position. The race on Sunday runs to a distance of at least 305 kilometres, usually between 44 and 78 laps depending on the circuit, with a two-hour limit on running time. Six weekends a season replace the second practice with a sprint, a shorter race of 100 kilometres with its own brief qualifying session and a smaller set of points, which does not affect the grid for the main race.

Each race awards points to the top ten finishers on a fixed scale, and those points feed two competitions at once:

• •25 points for a win, then 18, 15, 12, 10, 8, 6, 4, 2 and 1 down to tenth place
• •One extra point for the fastest lap, provided the driver finishes in the top ten
• •The Drivers' Championship goes to the individual with the most points at the end of the season
• •The Constructors' Championship adds both of a team's cars together, and this is the one that decides prize money, so a team's finishing position is worth tens of millions
• •A sprint awards 8 points down to 1 for the top eight, on top of whatever the main race gives
• •Reduced points are awarded if a race is stopped early and less than three quarters of the distance is completed

Overtaking on track is hard because a following car loses downforce in the turbulent air of the one ahead, which is why the 2022 regulations redesigned the cars around ground effect to reduce that wake, and why the drag reduction system exists, opening a flap in the rear wing to give a chasing driver a straight-line advantage within a second of the car ahead at designated points. The larger lever is strategy. Every driver must use at least two of the three dry tyre compounds during a race, which forces at least one stop, and the compounds trade grip against life, with the softest being fastest for a short period and then falling away. A stop costs roughly twenty to twenty-five seconds in total, of which two or three are stationary, and the whole tactical game is choosing when to spend it. Undercutting means stopping earlier than a rival and using the fresh tyres to make up the time before they stop; overcutting means staying out longer on old tyres to gain track position while the rival is slowed on cold new ones. A safety car, deployed to neutralise the field after an incident, makes a stop far cheaper because the whole field is slowed, which is why a well-timed accident reshuffles a race completely.

For decades the sport's competitive order tracked spending almost exactly, with the largest teams outspending the smallest by a factor of five or more and winning accordingly. Since 2021 a cost cap has limited what a team may spend on performance, set around 135 million dollars a year and adjusted for the number of races and for inflation. Driver salaries, the three highest-paid staff, marketing and engine development are excluded, so it does not cap everything, but it caps the wind tunnel programmes, the aerodynamic update parts and the staff numbers that used to decide seasons. A second rule works alongside it: aerodynamic testing time, in the wind tunnel and in computational simulation, is allocated on a sliding scale, with the team that finished last getting substantially more than the team that finished first. Breaches are enforced by the governing body with financial penalties and reductions in testing time, and the cap has been the most significant change to the sport's competitive structure in a generation.

The stewards, a panel including a former driver, police the racing and have a graduated set of sanctions: a five or ten second penalty added at the next pit stop or to the final time, a drive-through, a pit lane stop of ten seconds, a grid penalty at the next race for offences such as exceeding the permitted number of engine components, and points on a licence that trigger a race ban at twelve within a year. Track limits, meaning the white line at the edge of the circuit, are policed automatically and repeated violations delete lap times and draw penalties. The flag system communicates with drivers directly: yellow for danger ahead and no overtaking, double yellow for a serious hazard and be ready to stop, red to stop the session entirely, blue to tell a lapped car to move aside, and the chequered flag at the end. Most of these date from an era before radio and remain because a flag is visible when a radio has failed.

A weekend runs three practice sessions, a three-stage knockout qualifying that sets the grid, and a race of at least 305 kilometres, with points to the top ten feeding both a drivers' title and a constructors' title that decides prize money. Overtaking is difficult because of the wake behind a car, so races turn on tyre strategy and the timing of a stop that costs about twenty seconds, which a safety car makes far cheaper. Since 2021 a cost cap of roughly 135 million dollars, plus wind tunnel time allocated in inverse order of finishing position, has compressed the field.