After the first 11 races of the season, Mercedes is widely regarded as the benchmark in Formula 1. Eight victories, 11 pole positions and comfortable leadership of both championships have reinforced that impression. Much of the paddock considers the Brackley team’s formidable power unit to be one of its greatest strengths. Yet according to Formula 1’s ADUO system, Mercedes does not have the best-performing internal-combustion engine.
That apparent contradiction goes to the heart of one of the most interesting aspects of the 2026 power-unit regulations. ADUO was created to help manufacturers that fall behind recover through additional development opportunities and cost-cap concessions. However, because eligibility is determined by the performance of the internal-combustion engine rather than the complete power unit, the mechanism can potentially benefit a manufacturer whose overall package is already among the strongest in Formula 1.
What is ADUO and why was it introduced in Formula 1?
ADUO stands for Additional Development and Upgrade Opportunities. The mechanism was introduced as part of the 2026 Formula 1 Technical Regulations and allows manufacturers meeting specific performance criteria to update their homologated power unit during the current season and, depending on their classification, the following campaign.
The intention is straightforward: manufacturers struggling for performance should have an opportunity to recover ground rather than being locked into a disadvantage for an extended period. Alongside homologation changes, the framework can provide development and financial concessions. The potential cost implications form part of the wider 2026 power-unit budget-cap considerations facing Ferrari and Mercedes.
The crucial detail is that ADUO eligibility is determined solely by the performance of the internal-combustion engine, or ICE. The evaluation does not rank the complete hybrid power unit, even though the electrical side has become an extremely important part of total performance under the 2026 regulations.
This distinction between the combustion engine and the overall power unit is fundamental to understanding why the ADUO rankings do not necessarily mirror the competitive order seen on track.
How the FIA applies the ADUO system
The FIA established three periods during the season after which ICE performance is analysed to determine which manufacturers can benefit from ADUO. The first assessment period began with the Australian Grand Prix and concluded in Canada. It was originally intended to cover six races but was shortened following the cancellation of Grands Prix in the Middle East.
The second period ran from Monaco through the Hungarian Grand Prix, while the third begins after the summer break at Zandvoort and concludes with the Mexico City Grand Prix. For a deeper explanation of the mechanism and its original objectives, the ADUO development system and its implications for F1 manufacturers provide important context.
To establish eligibility, the FIA uses an ICE Performance Index calculated from data collected from the cars during Grand Prix weekends. Among the parameters considered are torque transmitted to the input shaft, engine speed and power supplied by the MGU-K. However, the FIA has not publicly disclosed the complete algorithm used to determine the index.
A manufacturer whose ICE Performance Index is at least 2% but less than 4% below the best-performing internal-combustion engine is entitled to one additional homologation upgrade during the current season and another in the following season.
Manufacturers whose index is at least 4% below the leading ICE are entitled to two upgrades in the current campaign and another two in the following season. These concessions create a meaningful opportunity to alter the competitive balance between Formula 1’s power-unit manufacturers.
Why ADUO can potentially help a manufacturer already ahead
The apparent contradiction emerges because the internal-combustion engine is no longer the only major factor determining power-unit performance. That is particularly significant in 2026, when the balance between combustion and electrical power has moved much closer to a 50-50 split.
ADUO, however, seeks to balance only the combustion side of the equation. As a result, the best complete Formula 1 power unit is not necessarily equipped with the best ICE. A manufacturer could therefore possess the strongest overall propulsion system while still falling far enough behind on combustion-engine performance to qualify for additional development opportunities.
That is precisely why analysing the difference between Mercedes’ complete power unit and its ADUO ICE ranking is so important. On-track performance reflects the interaction between the combustion engine, MGU-K, energy management, control systems and the way each team deploys electrical power throughout a lap.
Red Bull Ford leads the ICE ranking as Mercedes qualifies for ADUO
Following the first assessment, Red Bull Ford Powertrains emerged as the reference internal-combustion engine. Mercedes, meanwhile, was classified in the 2-4% deficit band, giving the German manufacturer one homologation update for 2026 and another for 2027.
The result surprised many observers, including Red Bull. The Milton Keynes operation requested another assessment from the FIA, but the governing body confirmed its verdict.
Mercedes’ complete power unit is widely regarded within Formula 1 as the benchmark, but that does not automatically mean its internal-combustion engine is the strongest of the field. The ADUO calculation evaluates those two concepts differently, which is why the result can appear contradictory when compared with Mercedes’ performance on track.
ADUO measures the ICE but upgrades can improve the wider power unit
Another crucial element makes the situation even more significant. Although additional development opportunities are awarded on the basis of ICE performance, manufacturers can use those opportunities to modify several areas of the power unit rather than being restricted exclusively to the combustion engine.
The permitted developments can involve the MGU-K, energy recovery and storage systems, turbocharger, wastegate, exhaust system and the car’s control electronics, among other eligible components.
In other words, the FIA uses ICE performance to determine whether a manufacturer needs additional development freedom, but those concessions can subsequently be used to improve areas in which that same manufacturer may already be extremely competitive.
That is not a minor distinction. It means ADUO can have consequences beyond simply helping an underperforming combustion engine recover lost ground, potentially affecting the overall competitive balance between power units.
Why the FIA chose ICE performance instead of the complete power unit
The FIA’s approach has a clear technical rationale. Assessing the performance of a complete hybrid power unit would be considerably more complicated because electrical performance depends heavily on the recovery and deployment strategies employed by individual teams.
Energy harvesting, battery usage and electrical deployment can vary according to circuit characteristics, car configuration and the way teams choose to manage power around a lap. Including all of these variables in an already complex calculation would make it considerably harder to distinguish the fundamental quality of a power unit from the strategy used by the team operating it.
Focusing on the ICE instead gives the FIA a parameter that can be compared more consistently across manufacturers without turning the system into the type of conventional Balance of Performance used in some other forms of motorsport.
The Red Bull-Mercedes situation therefore does not demonstrate that the ADUO calculation is mathematically incorrect. The FIA designed a specific system to assess internal-combustion-engine performance, and the regulations are being applied according to that objective. The more fundamental question is whether measuring the ICE alone remains sufficient in an era when electrical power has become such a large part of the performance equation.
The central problem facing F1’s ADUO system
If a manufacturer classified as disadvantaged by the ICE Performance Index can then use its ADUO concessions to develop components on the hybrid side, the additional opportunities may not necessarily go to the manufacturer with the least competitive complete power unit. Instead, they can go to the manufacturer with the least competitive combustion engine within an otherwise extremely strong package.
This distinction may appear subtle, but its consequences could be significant in the battle between Formula 1’s power-unit manufacturers. The FIA itself has already faced questions over the mechanism, with ADUO’s potential areas for improvement becoming part of the regulatory debate.
For Ferrari, the system is particularly relevant as development continues on the SF-26 power unit. The Scuderia’s next major step is expected around Monza, where its planned power-unit development is expected to provide another performance gain.
ADUO was designed to prevent manufacturers from being trapped behind their rivals, not to create a traditional performance-balancing system. Yet the first half of 2026 has highlighted the difficulty of applying that principle to modern Formula 1 power units. When combustion and electrical performance are so closely intertwined, determining who genuinely needs additional development freedom is no longer as simple as identifying the strongest engine.
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