Toto Wolff has said Mercedes does not have the money available to immediately match the surge of upgrades which has seen McLaren's Lando Norris record back-to-back Formula 1 victories.
McLaren brought major upgrade packages to races in Budapest and Zandvoort either side of the August break, events both won by Norris.
In championship battles teams are known to fast-track counter-upgrades of its own when rivals make significant progress, but this is more complicated in the modern era as Formula 1 teams are now constrained by a yearly cost cap, which means the timing of upgrades becomes crucial.
That is extra significant this season, with F1 now in the first year of a regulation cycle.
The Mercedes boss said his team's spending so far means the team does not have anything to immediately counteract McLaren's improvements.
"We haven't got the money to put developments on the car," Wolff said. "I said it before, we are trying to evenly split that through the season, based on our calculations of when we can bring the biggest updates and optimising the championship points. We just can't do what we can't do."
Mercedes started the new regulation cycle as clear favourites, which might suggest it spent more than its rivals coming into the season, which would leave it less financial leeway to upgrade the car relative to others at this point.
While that appears to be the case, Wolff hinted that Mercedes still has wiggle room within the cost cap later in the year to introduce upgrades.
"That's why it is a development race," he said. "If you bring an upgrade, each of the top teams will have a couple of tenths in it, at least, and that's what we lose.
"So yeah, the ride is going to be tougher than at the beginning of the year. But you will see if toward the end of the season [if] they are going to be able to deploy as much stuff onto the car as they do now. Someone might have a different strategy in spending more at the beginning and in the middle of the year than toward the end."
The impact of the differing upgrade schedules has been clear. Both of Wolff's drivers left Zandvoort convinced Mercedes has been firmly displaced at the top of the competitive order.
"I mean, for sure, we're clearly not the fastest car anymore on the grid," said championship leader Kimi Antonelli. "We're probably second or third, at least in today's race, and McLaren has taken a huge step, especially since Hungary, since the big upgrade package they brought."
Like Wolff, Antonelli suggested the team are bullish about what's in the pipeline later in the year.
"I'm confident with the team. You know, the team has been working super hard on this next package that is coming up, and they just want to make sure that it's going to work out well once we put it on," Antonelli said.
"So for sure, in this race, it's going to be more difficult, it's going to be challenging, but we're ready to do our best and to maximise every opportunity. And then hopefully it's going to be our turn to bring the package that's going to give us a little bit of the upper hand again."