The cost cap is the biggest adversary facing Mercedes’ mission to regain momentum after slowly exiting the gates of the 2022 Formula 1 season.

Between an apparent lack of power from their old network-topping power unit and a car design suspected of producing excessive drag, Mercedes got off to a shaky start in the new era of Formula 1 regulations.

At the dawn of these new rules, there is no better time to reclaim ground from the leaders and return to a competitive state.

Bringing a new rear wing design to Saudi Arabia in a bid to reduce said drag, Mercedes stayed well off the pace of Ferrari and Red Bull, but remains a “best of the rest” despite a historically poor qualifying performance from Lewis Hamilton due to a setup approach that didn’t pay off.

Hamilton still managed to climb back into the points with the help of plenty of DNFs, and he had a brilliant battle with Kevin Magnussen’s Haas.

Going into the third round of the 2022 season, Mercedes are expected to implement a “major” upgrade. This is happening on an adjusted Albert Park Circuit which will sport a smoother and faster layout with four DRS zones, more closely resembling the Jeddah Corniche Circuit than its former self.

Mercedes’ upgrades are expected to include a new rear wing concept, likely more dramatic than the cutout seen in Saudi Arabia, and complementing the floor improvements.

Meanwhile, favorites Ferrari and Red Bull have been able to delay their first round of major upgrades.

Currently working on a speed-focused part of the schedule to start the season, Ferrari are set to introduce their first upgrades for Imola or Spain while championship rivals are planning a reduction-focused seven-figure upgrade package. of weight for Imola.

While their championship rivals focus spending on real improvements to their car’s design, Mercedes are stuck spending money on fixing issues that should never have been present for their first race in Bahrain.

This represents not only a tangible disadvantage in managing the $140 million budget cap, but the loss of time during a crucial period of exponential development at the start of this new era of regulation.

Now let’s assume that Mercedes is able to implement all the necessary improvements to bring its car up to speed with Ferrari and Red Bull by the summer break. We have just seen Grands Prix in France and Hungary in which three manufacturers have cars capable of competing for pole and staying within a second of each other over the course of a racing lap. It’s fantastic until reality sets in.

Mercedes have just spent the majority of their development budget for the season on catching up to be on the hunt for wins midway through the season. This front-end development now leaves the factory team with little to no resources to implement upgrade packages as the high-speed Spa and Monza sites move ever closer.

Meanwhile, Ferrari and Red Bull are emphasizing summer vacation upgrades as they return to base for a month and analyze their shortcomings from the first 13 races. Both championship manufacturers continue to implement major upgrade packages encompassing a large portion of their development budget and return Mercedes to the “best of the rest” designation.

In order to make the gains needed to compete for race wins, Mercedes will invest disproportionate financial resources and jeopardize their relative pace in the second half of the season. It also sets them back for the 2023 season as teams make major philosophical changes after a season of lessons on the new regulations.