There is only one way of earning points in Formula 1 and that is by racing. Each of the 10 fastest drivers competing in a Grand Prix are awarded points. 25 for first, 18 for second, 15 for third, 12 for fourth, 10 for fifth, 8 for sixth, 6 for seventh, 4 for eight, 2 for ninth and 1 for tenth. When there is a Sprint Race points are awarded to the eight fastest drivers on a sliding point scale of 8 points down to 1 point.

The race results are tabulated race by race like this-

They are added up and the driver with the most points at the end of the racing year is the Formula 1 World Drivers’ Champion.

Each driver is one of two drivers who enter each race in a constructor’s car. The constructor is awarded the accumulated points that their drivers gained in each race. That looks like this-

In the above graphic you can see two anomalies.

The first anomaly is Yuki Tsunoda has a dotted line going to two teams with minus three showing at Red Bull and plus three pointing to Racing Bulls. This is to show that the Red Bull’s total figure is not a summation of Max Verstappen and Yuki Tsunoda points. This is because three of Yuki Tsunoda’s ten points were earned by Yuki when he was driving for Racing Bulls before he replaced Liam Lawson at Red Bulls after the first two races.

The other anomaly is that Alpine has three drivers contributing to Alpine’s points. Alpine demoted Jack Doohan to reserve driver and replaced him with Franco Colapinto after the first six races. This is for clarity even though Pierre Gasly has earned all Alpine’s points.

The above figures show both the World Drivers’ Championship and World Constructors’ Championship position after the Hungarian Grand Prix.

As to why they matter.

The World Constructors’ Championship is partially responsible for the prize money that the teams earn each year. The prize money is awarded according to three criteria. The first is their actual position in the World Constructors’ Championship in a given year. The second is their position over the prior decade. The last is only given to Ferrari for their contribution to F1 being the only team to have competed since 1950. These percentages are not commonly known as they are contained in the secret concord agreement.

Last year the prize money was over a billion US dollars. The prize money for 2024 that is paid out this year was allocated to the teams as follows-

A difference of $10 000 000 between ninth and tenth and much more for higher World Constructors’ Championship positions is really worth fighting for.

For a driver to win the World Drivers’ Championship provides him with two greater earning potentials. One being the salary he is paid to drive which may contain enormous performance bonuses as well as a higher base salary as a World Drivers’ Championship holder. The other is his fees for promoting companies and/or products are much higher as a champion driver.