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How energy price move helped boost Alpine's F1 development push

Alpine has revealed that a "smart" inflation-beating move earlier this year helped give it the financial headway needed to be aggressive with its Formula 1 developments and hire more staff.

Fernando Alonso, Alpine F1 Team A522 and team mate Esteban Ocon, Alpine F1 Team A522

Fernando Alonso, Alpine F1 Team A522 and team mate Esteban Ocon, Alpine F1 Team A522

Alpine

The Enstone-based squad has been relentless in bringing upgrades to its A522 car, which has helped Fernando Alonso and Esteban Ocon score the points to put it fourth place in the constructors' championship right now.

And while rival teams have had their developments constrained by F1's cost cap, Alpine has not had to hold back, and furthermore is planning a recruitment drive to boost its staffing levels to help it push further up the grid.

It has emerged that one of the reasons Alpine has been able to afford the extra spending is because of a strategic decision it made early in the year to pre-empt the massive rises in energy costs that have hamstrung other F1 teams.

Predicting that electricity and gas costs were going to shoot through the roof in the wake of the Russian invasion of Ukraine, it pre-bought as much energy as it could, sheltering itself from the increased costs that came through the system later on.

Alpine team principal Otmar Szafnauer reckons the move saved the squad a sizeable amount of money, which it was then able to devote to ramping up performance of its car and team.

"We bought energy early and that saved us millions," explained Szafnauer, speaking to Motorsport.com about the progress of Alpine over the first half of the season.

"It was future energy and some material, so a smart move."

Cost cap limit

Alpine has embarked on a mission to be fighting at the front of the grid by the end of its first 100 races under its new identity.

And while its challenge to improve things has been made tougher by the imposition of a cost cap in F1, Szafnauer says that the situation the team is in is actually a good one because of the way it was operating below the budget limit.

Otmar Szafnauer, Team Principal, Alpine F1, Pat Fry

Otmar Szafnauer, Team Principal, Alpine F1, Pat Fry

Photo by: Carl Bingham / Motorsport Images

And that has been helped in no small part by the energy purchasing strategy it took.

"We're, I don't want to say significantly under the cost cap, but comfortably under the cost cap," explained Szafnauer.

"That was done probably half by some good strategic decisions. Some of the finance people within the organization saw the inflation coming at the rate that it is now and therefore made some good decisions to buy some things early at a cheaper price that you know you're going to use in the future.

"And that's helped for this year. But that's only a one-year thing.

"But structurally too, we are structured a bit differently, where under the cost cap, I think we're better off than some of the other teams.

"So it has helped and what it's allowed us to do is it's given us that headroom to hire another 75 people without worrying about going over the cost cap, which is great. It's a good position to be in."

Szafnauer also reckons that the emergency increase in the cost cap that was agreed among teams before the summer break, following alarm from Alpine's rivals about energy prices forcing them to bust the limits, has helped give his squad more freedoms too.

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"The cost cap has increased for this year by $4.3 million, and I think probably about the same for next year," he said. 

"So the $135m that it was meant to be next year will probably be in the region of $141-145m. That in itself gives us some headroom, although next year we will probably be buying the things that we bought at last year's prices, at next year's prices next year, because we didn't hedge that far in advance.

"So there's a bit of understanding there to do as to how much inflation will actually eat into the cost cap, but it won't be 100%. Then we need to have an understanding of how much headroom we have to fill that headroom. So that's what we're doing."

 

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