One of the most shocking moments of the Monaco Grand Prix weekend had nothing to do with the racing. Instead, it happened in motorhomes on Sunday afternoon, when the FIA distributed a one-page document to Formula 1‘s power unit manufacturers.
The letter contained the ruling body’s decision about which teams would be allowed to upgrade their engines following its analysis of the 2026 power unit of all manufacturers: Mercedes, Ferrari, Red Bull Ford, Audi and Honda.
The verdict was so counterintuitive that it was no surprise that the reaction was mostly one of shock.
Red Bull Ford has been declared Formula 1’s best power unit under the Additional Development and Upgrade Opportunities (ADUO) system, which is designed to ensure that no one manufacturer dominates the series. It means that Mercedes and Ferrari will both be able to upgrade their engines during the 2026 season.
The broader context is easy to understand if you have been following the 2026 season.
Mercedes, whose power unit has just been officially rated as inferior to Red Bull‘s, has won all races so far this year and currently leads both the drivers’ and constructors’ championships by a considerable margin, with Kimi Antonelli extending his title lead with a dominant victory, his fifth in a row.
Red Bull, meanwhile, faces the agony of knowing that its hands are now tied and it can’t make improvements, and has less spending and bench test hours than others for having, according to the FIA, produced a debut engine that’s superior to that of its rivals.
Mercedes has won all six races of 2026 so far
The verdict is disappointing for Ferrari as well: its engine has been judged to be lagging Red Bull’s by such a margin that it will be entitled to two upgrades this season. And it might have imagined that this would allow it to match the pace of the championship-leading Mercedes.
But because Mercedes has also been allowed an upgrade — just the one — the Scuderia’s hopes of reaching parity have been dampened.
On the face of it, the catch-up system designed to level the playing field has, at its very first assessment, benefited the dominant team.
What ADUO was supposed to do
The ghost haunting the 2026 regulations has always been 2014.
When Formula 1 last undertook a wholesale power unit overhaul, Mercedes produced a hybrid V6 so far ahead of its rivals that the competitive order was effectively set for the better part of a decade.
The sport’s governing body was determined not to allow that to happen again, and ADUO was supposed to be the safeguard.
The mechanism is straightforward in principle.
ADUO is granted to manufacturers who are down on performance to the leading power unit by 2% or more. Those trailing by between 2% and 4% get one opportunity to develop their power unit this season and one more in 2027, while those trailing by 4% or more get two opportunities in 2026 and two further in 2027.
There is also a financial component: any manufacturer between 2% and 4% off the benchmark gets an extra cost-cap allowance of several million dollars depending on the bracket.
The FIA’s goal was to avoid a repeat of the initial hybrid era
The intention was that no manufacturer would ever again find itself in the position Honda occupied at McLaren, technically capable of building a brilliant chassis while being paralysed by a power unit it had no means of fixing.
The verdict from Monaco reflects how wide the performance gaps have grown.
Beyond the Red Bull benchmark, Mercedes was indexed as next-best but more than 2% behind, earning it one upgrade opportunity.
Ferrari, Audi and Honda have all been deemed to be over 4% adrift of Red Bull and get two upgrade homologations as a result.
Mercedes will also receive an extra $3 million cost-cap allowance and an additional 70 hours of bench testing.
The problem hiding in plain sight
Here is where the logic of ADUO begins to unravel.
The system assesses only the internal combustion engine element of the power unit.
Any advantage a team has from better energy harvesting, deployment, efficiency, or more advanced management of energy – which includes control of the MGU-K or better battery technology, is totally outside the remit of what falls under the qualifying criteria for additional development.
ADUO only takes into account the ICE’s performance
Grand Prix Photo
That might have been a reasonable design choice in the old hybrid formula, where the ICE contributed the vast majority of a power unit’s output. It is a far more questionable one in 2026.
Under the new rules, the power output from the ICE has been reduced from 560kW to 400kW, while the output from the hybrid system has been increased from 120kW to 350kW.
In other words, electrical power now accounts for roughly half of total output, and in certain circuit conditions, where harvesting and deployment cycles are optimised, it can be decisive.
The ICE, the only element ADUO actually measures, is no longer the primary differentiator. The electric architecture — battery efficiency, MGU-K integration, energy deployment mapping — is where the fastest manufacturers have built their advantage.
ADUO assessment is not representative of full power unit performance, given that the energy recovery system (ERS) also plays a crucial role in overall power output.
What this means in practice is that the ICE-only benchmark may bear very little relationship to which manufacturer’s complete power unit is actually quickest.
Red Bull’s combustion engine has been judged the best, but Red Bull is struggling compared to Mercedes and Ferrari, already languishing 172 points behind the German manufacturer.
A perverse outcome
The consequences of the verdict compound in ways that are difficult to justify.
The decision is likely to generate a storm in the paddock
Grand Prix Photo
With the way the system works, Mercedes can now devote extra resources and bench testing to improving its engine and not bring upgrades on track until it chooses, thereby keeping Red Bull as the benchmark while Mercedes itself continues winning.
That means Red Bull could remain hamstrung for a while yet.
The team that is dominating the championship will receive development freedoms that the team trailing it will not.
Ferrari, which has been broadly the second most competitive team, will get two upgrade opportunities this season, but the target it is aiming at has just been given permission to move.
Ferrari is no longer chasing a stationary target, and if Mercedes has plenty in its back pocket, as many believe it does, it could find that it may not even get any closer despite the extra development opportunities it now has.
The paddock had not been blind to this possibility.
Before the verdict landed, Red Bull boss Laurent Mekies had articulated what most of those in it believed to be the true pecking order.
“You look at your gap to the best competition, and today we think the pecking order is Mercedes in terms of powertrain ahead of the field,” he said. “We think behind them there is a group where we see us, Ferrari, Audi – don’t ask me to quote the numbers because it will be gaming – but we see certainly a consistent gap compared to the Mercedes-Benz-powered cars.
“And then it’s probably fair to say that we read Honda further back. And how is that going to fit any of the grid that the FIA calculation is trying to do? We will soon find out.”
He found out on Sunday in Monaco, and his answer bore little resemblance to the picture he had just described.
Honda will get the same benefits as Ferrari and Audi
Grand Prix Photo
Toto Wolff, meanwhile, had anticipated a different kind of problem. His concern before the verdict was that rivals would exploit ADUO to close Mercedes’ advantage – a use of the system he regarded as contrary to its original purpose.
“The principle of the ADUO was to allow teams that were on the back foot to catch up — but not to leapfrog,” he said.
The reality has turned out stranger still: the system is not helping a rival like Red Bull catch his team at all. It is helping it pull further away.
A regulation in need of revision?
It’s easy to predict that the decision will cause a storm in the paddock and that there will be calls for a change in the way in which performance is measured to incorporate more aspects than simply internal combustion engine power.
Some might even ask for ADUO to just be scrapped altogether.
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By
Pablo Elizalde
A regulation that was conceived to prevent one manufacturer from locking out competition for a decade has, by its narrow definition of what constitutes performance, created a situation in which the most successful team this season will be given tools to extend its advantage.
The FIA’s framework is not wrong in spirit. The instinct to protect the sport from another decade-long engine hegemony is sound.
But the power unit of 2026 is not the power unit the framework was written for. ADUO appears to have been designed for a scenario where the combustion engine was king. That scenario doesn’t seem to exist.
At its very first test, ADUO has found a benchmark that is winning in bench tests but losing on the track, and rewarded accordingly.
Whether that constitutes failure at the first hurdle depends on your definition of what ADUO was supposed to achieve. For the teams now frozen out of development while the championship leader adds resources to an already dominant package, the answer seems clear.
