Toto Wolff says Mercedes does not currently have the budget to match the 2026 Formula 1 upgrade pace being set by Ferrari and McLaren, with the W17’s second major development package not scheduled to arrive until Malaysia. The Mercedes team principal has pointed to the cost cap and the team’s decision to spread its spending across the season, but the wider picture also involves different development strategies and new regulatory allowances linked to 2027.
There have been few certainties in Formula 1 in 2026, but one factor has been clear since the beginning of the year: the championship battle is likely to be decided largely by the development race. Starting the season with a significant advantage over the opposition was obviously desirable because it allowed teams to plan the rest of the campaign with greater confidence, but at the beginning of a new technical cycle, the ability to develop the car remains crucial.
Mercedes F1 upgrades become decisive in 2026 title fight
McLaren and Ferrari have made important progress in recent months, continuing to introduce upgrades to their respective cars. Ferrari has been particularly aggressive, bringing some form of new development to almost every race, while McLaren found renewed momentum with the updates introduced in Hungary, which provided the MCL40 with the pure downforce it had been lacking.
Ferrari’s approach has been especially extensive. The Scuderia has continued developing both the aerodynamic and power-unit sides of the SF-26, with its development programme extending from the Zandvoort aerodynamic package to the planned Monza power-unit upgrade.
Mercedes, by contrast, has been the leading team to remain relatively static for the longest period. Even after the enforced April break, the Brackley squad decided against immediately introducing new parts when Formula 1 returned in Miami. Instead, Mercedes took several additional weeks before bringing its first substantial package to Canada. Since then, however, the updates have been limited and relatively minor.
Toto Wolff has already announced that Mercedes’ second major upgrade package will arrive in Malaysia. That means not only waiting at least another three races before Formula 1 travels to Sepang, but also leaving a gap of no fewer than ten Grands Prix between the first and second major packages. In a season where development is playing such a decisive role, that is a very long interval.
Until those new parts arrive, the W17 is relying on its existing strengths, particularly its straight-line speed. However, the Dutch Grand Prix weekend showed that the car is now beginning to lack downforce compared with its improving rivals. At the same time, as long as Mercedes remains capable of fighting at the front despite introducing only minimal updates, it can partly afford to wait and effectively use up some of the advantage it previously enjoyed.
Toto Wolff says Mercedes has “no money” for more upgrades
Within Mercedes, there is confidence that the second major package will produce a significant step forward. The obvious question, therefore, is why the team is waiting so long to introduce it, especially now that the advantage it enjoyed earlier in the campaign has diminished.
For Toto Wolff, the explanation is primarily connected to the budget cap and Mercedes not having the same resources available for development at this stage of the season as its rivals. Since Canada, Mercedes has introduced only refinements to its wings, suspension covers and other minor details, without, for example, making further changes to the floor.
“We haven’t got the money to put developments on the car. I’ve said it before: we’re trying to spread the upgrades evenly throughout the year, based on our calculations of when we can introduce the most important developments and optimise the championship points. But we simply can’t do what we can’t do,” the Mercedes team principal explained – “That’s why it’s a development race. If you bring an upgrade, each of the top teams gains at least a couple of tenths, and that’s what you lose. So yes, the path has been a little tougher compared with the beginning of the year.”
Toto Wolff was then asked why Mercedes would not have the necessary budget to sustain the same rate of development as Ferrari and McLaren: “You’ll see towards the end of the season whether they can put the same amount of things on the car as they are bringing now. Someone may have a different strategy, spending more at the beginning and middle of the year than at the end.”
It is not the first time Toto Wolff has raised the subject of the budget cap. Even before the break, the Mercedes team principal had questioned how Ferrari could maintain such an intense rate of development.
Ferrari and McLaren have taken different development paths
There are several considerations to make when assessing that argument. The first is that Formula 1 teams can legitimately follow very different development schedules over the course of a season.
McLaren has taken a different route from Ferrari. The Woking team initially waited to understand what the MCL40 was missing before beginning to shift its concept from Hungary onwards. Ferrari, on the other hand, had a clearer idea of its development direction from the start and has continued introducing new components throughout the season.
The Maranello team’s work has not been confined to a single area of the SF-26 either. Its recent development has included substantial aerodynamic work, with analysis of the new Ferrari floor introduced at Zandvoort showing that the package achieved its intended aerodynamic objectives even though other limitations remained.
Further examination of the Dutch Grand Prix weekend also indicated that Ferrari’s latest SF-26 upgrade delivered the expected improvement, underlining why Maranello has been prepared to maintain such an aggressive development schedule.
Why Ferrari has kept pushing the SF-26
For Ferrari, there is also a logical reason to maintain consistent chassis development. With an engine deficit that requires longer development times to address, it was essential for the Scuderia to continue bringing upgrades on the chassis and aerodynamic side with a certain degree of regularity.
That was important not only to keep Ferrari in the championship fight, but also to increase the pressure on Mercedes. By continuing to close the performance gap, Ferrari could make it more difficult for Mercedes to halt development of the W17 early and begin focusing ahead of schedule on its 2027 car. The power-unit weakness remains an important part of that equation. Ferrari’s problems with energy management became particularly evident in the Netherlands, where the SF-26’s hybrid and power-unit deficit was again exposed at Zandvoort.
Ferrari is consequently continuing to work on both fronts. Its next power-unit step is already being prepared, with the team completing final testing ahead of the ADUO 2 upgrade planned for Monza.
The wider strategy has worked in terms of keeping the pressure on Mercedes, although the championship leaders have also been affected by numerous retirements caused by reliability problems. Those failures reduced a Mercedes advantage that could otherwise have been even larger.
Toto Wolff, however, does not believe Mercedes’ current budget limitations are the consequence of excessive spending during the initial development phase of the W17: “Did we spend too much at the beginning and on the initial development? I don’t think so. I think we are a company of a certain size and infrastructure,” he added.
2027 rules add another layer to the Mercedes budget argument
There is, however, another particularly interesting element that has received less attention. With changes being made to the power units and aerodynamics ahead of 2027, the FIA has provided an additional $3 million allowance, deducted from expenditure, for both this year and next year, taking into account that the engines will change again in 2028.
At that point, the issue becomes less about the amount of money available and more about how teams choose to divide their wind-tunnel hours between the current season and development for the next one.
Naturally, those exemptions have been introduced primarily with 2027 in mind, but teams still retain the freedom to manage their resources independently. The wider complexity of balancing aerodynamic and power-unit development is one of the central themes throughout Ferrari’s 2026 technical development programme.
McLaren team principal Andrea Stella also highlighted this point when asked whether he believed Mercedes would really introduce only a limited number of further developments.
“I’d like to believe you, but actually I don’t. And I don’t believe it because, thanks to the 2027 power-unit regulations, all teams will have an allowance in their cost-cap reporting,” Andrea Stella said.
“I’m sure Mercedes, having seen that its rivals are raising the level, will now exploit the development that is certainly already taking place behind the scenes. I’m sure the car in the wind tunnel is quite a lot faster than the one they have on track and that they will want to convert some of that potential into upgrades that arrive on the actual car.
“So I’m fairly sure they will have upgrades. Obviously, it would be better if they didn’t, but I don’t even want to think about it.”
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