Finding the apex: legal and regulatory considerations for new F1 teams

The film F1, which sees Apex GP, a fictitious team, join the back of the Formula 1 grid, took the motorsports world by storm following its release in June 2025. Now, ahead of Cadillac F1’s debut at the start of the 2026 season, this article considers the key regulatory and legal considerations for new teams joining the FIA Championship.

Regulatory considerations

FIA entry requirements

The Federation Internationale de L’Automobile (FIA), the main governing body for many major motorsports championships, requires all new team entries to demonstrate technical capability, financial stability, and a commitment to the sport’s values: passion, integrity and respect.

Cadillac brings a wealth of experience to the table, including the legacy engineering of General Motors and the TWG motorsports partnership – a collaboration with a high-performance racing group which operates across Formula 1, NASCAR and Formula E, amongst others.

Cadillac’s technical abilities are extensive, demonstrated through its commitment to building and upgrading facilities to meet the high demands of Formula 1’s standards. This includes a $150 million investment in a new factory dedicated to developing Cadillac’s own power units.

Concorde Agreement

With 2026 bringing a new cycle of technical regulations, a new Concorde Agreement will be signed, as a tripartite contract between the FIA, Formula 1, and all participating teams. The agreement works to regulate and formalise how the sport operates and is renegotiated periodically.

Under the 2026 agreement new team entrants will face a multi-million dollar price tag – an anti-dilution fee designed to protect the value of existing teams and compensate for the dilution of the prize fund caused by expanding an already packed out grid.

2026 technical regulations

The technical regulations are regularly updated with a focus on keeping the sport safe, competitive, innovative and, as fans would argue, exciting. 2026 will see one of the most radical regulation overhauls in history, reducing weight and increasing aerodynamics, the introduction of more sustainable 50:50 combustion and electric engines, and dual mode wings to increase competition.

The challenge for newcomers is the absence of historical data which other teams have compiled over decades on track. To their advantage though, all teams have a short time frame to build and test new cars compliant with the 2026 regulations, and so, newcomer Cadillac has a rare opportunity to disrupt the field of established teams.

Employment considerations

Drivers

Drivers contribute far more to a new team than simply fast and safe hands behind the wheel. They offer strategic insight into car development, serve as global brand ambassadors, and often play a key role in securing and bringing in vital sponsorships.

Cadillac recently announced the new signings of Valtteri Bottas and Sergio Perez, both seasoned drivers who debuted in Formula 1 in 2013 and 2011 respectively. Both drivers are expected to provide valuable input into car development, optimise race setups, and contribute meaningfully to race strategy.

Contract negotiations

Behind these high-profile signings lie complex contract negotiations. These agreements govern the financial and legal relationship between the drivers and the team, and securing favourable terms is critical for any new entrant to a motorsport series at any level.

When establishing contractual relationships, drivers typically work closely with agents and legal representatives to safeguard their interests. In addition to remuneration through salary and performance bonuses, experienced drivers often seek multi-year contracts with limited exit provisions and release clauses that are weighted in their favour.

Conversely, a new team like Cadillac will require robust confidentiality provisions and post-termination restrictions to protect sensitive technical information. Motorsport sector-specific clauses, such as performance standards, may also be included as reportedly used by Red Bull Racing with its drivers during Perez’s tenure. These provisions require careful legal drafting and advice from professionals with expertise in motorsport contracts and the wider industry.

In the event of a contractual breach, teams must ultimately be prepared to enforce their rights, whether through injunctions to prevent further breaches or claims for damages. A notable example is McLaren Racing’s ongoing legal action against reserve driver Alex Palou, who allegedly breached his contract by withdrawing early in August 2023. The case is currently before the English courts and will be of particular interest to new teams like Cadillac navigating similar legal landscapes.

Intellectual property and image rights

In addition, contracts with teams will include detailed provisions relating to intellectual property and image rights, both of which are critical.

Cadillac, as a new entrant, will need to invest heavily in research and development to catch up to other established teams, resulting in the creation of proprietary technology and confidential know-how. Teams will typically want to retain full ownership of such intellectual property (IP) and impose strict limitations on its disclosure and use post-termination, along with any IP accessed by drivers during their tenure.

Drivers are global figures with substantial commercial value. All teams will seek to leverage their name, image, likeness, signature and personal brands in team marketing, sponsorships and merchandise. Image rights clauses will govern how a brand can use a driver’s image and identity, as well as ensuring compliance with applicable laws and protecting the driver’s position. These clauses must be carefully negotiated to balance a team’s commercial interests and safeguard the driver’s reputation and control over their public image across multiple jurisdictions.

ESG and sustainability

The sport’s international calendar and barrage of trucks, cars, parts and people means they are traversing the globe often on a weekly basis, all of which accumulates to thousands of air and road miles. With Formula 1 setting ambitious net-zero goals for 2030, new teams have their work cut out to meet these goals right from the start.

Sustainable cars

Formula 1’s goal for 2030 is for all engines to run on 100% sustainable fuels, an adoption which Formula 2 and 3 have already successfully achieved. The new 2026 technical regulations will see an impressive jump in the use of electric power from 20% to 50% in all of the car’s engines.

Fortunately for Cadillac, it is already equipped with hybrid and electric powertrain expertise, which will bolster its approach to aligning with Formula 1’s push towards a sustainable sport.

Logistics overhaul

Formula 1’s European haulage trucks now run on HVO100 biofuel, which reduces emissions by 83%. At Zandvoort in 2025, Mercedes-AMG Petronas F1 became the first team to transport its cars to a European race weekend using all electric trucks.

These electric trucks carry heavy upfront costs, especially for new team entrants such as Cadillac. Although the investment itself will fall outside of the technical cost cap, it will still affect budgets and must be justified to the companies’ stakeholders.

Not only do the trucks contribute to the net-zero goals, but the long term operating and maintenance costs are often that much less than standard combustion engines – short term pain for long term gain. New team entrants could be considered to be at an advantage through day one investment into sustainable logistics solutions, without having a fleet of vehicles to retire.

Whilst in practice these changes are great steps towards the net-zero goals, the teams must also align with the FIA’s Environmental Accreditation which sets benchmarks for sustainability across operations. All 10 longstanding teams have achieved the highest level, three-star accreditation, which may create added pressure for new team entrants to meet and maintain this level as a basic expectation.

For further information on the legal considerations for new F1 teams, please contact Lucas Grinstead or another member of our motorsports team.

This article was written by Lucas Grinstead, associate, and Abby Deller, trainee solicitor.