What if the biggest threat to Mercedes’ 2026 Formula 1 ambitions doesn’t come from Red Bull or Ferrari but from the rulebook itself?

As teams prepare for F1’s sweeping 2026 regulation reset, a potential gray area in the new power unit rules has drawn scrutiny from rivals and the FIA. And if the governing body steps in to close it, Mercedes could find its early development advantage suddenly under threat.

With development timelines already tight under Formula 1’s cost-cap era, any late clarification or adjustment carries outsized consequences. Power unit concepts locked in too early can be difficult to unwind, which is why even the hint of regulatory intervention has teams on edge as 2026 approaches.

The FIA is understood to be looking into the matter and is expected to make changes in the regulations to prevent the teams from exploiting any loopholes. While this could be a major hit to Mercedes, considering they’ve been working on the engine for the past year, Red Bull may be less exposed to any late clarification. This is owing to a former Mercedes engineer that RBR hired earlier this year, whose hiring has fueled speculation within the paddock about potential knowledge transfer.

How could Mercedes exploit the engine compression ratio as per the new regulation?

At face value, the 2026 Formula 1 cars will still use turbo-hybrid V6 engines, albeit with significant changes to the electric components. The 2026 regulations introduce a maximum geometric compression ratio of 16.0:1, a lower cap than teams have targeted in the current power unit era. This could see the cars lacking performance. 

Rival manufacturers argue that while the geometric compression ratio is capped, thermal expansion at operating temperatures could alter clearances in a way not fully captured by the static compliance test, potentially affecting effective performance.

The FIA has maintained that the regulations already define both the compression ratio limit and the method used to verify it, with checks carried out under static, ambient-temperature conditions. While the governing body acknowledges that thermal expansion can influence engine dimensions, the current framework does not include a compliance test at operating temperatures.

Reports suggest the debate has centered on Mercedes and Red Bull, with rivals asking the FIA for clarity on whether the ambient-only measurement method unintentionally opens a workaround. Understandably, manufacturers have been developing their power units with this potential gray area in mind. Newer reports claim that a former Mercedes engineer joined forces with Red Bull Racing around seven months ago, and this was when the Milton Keynes-based outfit began looking into the gray area.

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While teams routinely recruit talent from rival organizations, such moves often draw extra attention during major regulation changes. In this case, the timing of the hire has added another layer to the debate, with rival paddock figures questioning whether institutional knowledge from past projects could influence how quickly a team interprets and adapts to regulatory gray areas.

So where does that leave Mercedes?

As mentioned, the FIA has been eyeing this more recently. The authorities may bring a change in the rulebook right before the season starts. Although this would only allow for fair competition on the grid next year, it could be disastrous for Mercedes. As per the reports, the team has been working around the engine regulations’ gray area for the past year, putting most of their R&D into that.

Under the modern cost-cap structure, pivoting late is no longer a matter of simply spending more. Any forced redesign would require reallocating already-committed resources, potentially compromising performance elsewhere and leaving limited room for recovery once the season begins.

However, if the FIA did change the rules, Mercedes would not have a well-researched engine with less than three months to go into the new season. As for Red Bull Racing, they are expected to have some sort of way around this, considering they started working around the loophole quite late compared to the German manufacturer. 

Formula 1 has seen regulatory gray areas reshape the competitive order before. From Brawn GP’s double diffuser in 2009 to previous power unit interpretation battles during the hybrid era, early exploitation or late clarification has repeatedly proven decisive in determining which teams start a new regulation cycle on the front foot.

Could other teams on the F1 grid also be affected?

Mercedes is one of the most reliable engine manufacturers on the F1 grid. Their excellence in the turbo-hybrid V6 development saw them dominate for close to a decade. Understandably, other teams also entered a technical relationship with the manufacturer.

If the reports turn out to be true and Mercedes does face a situation where they don’t have competitive power units, all of their customer teams will also suffer from this. These teams include Williams Racing, Alpine, and the 2025 World Champions, McLaren.

Meanwhile, Red Bull is developing their own engines in a partnership with Ford, which will only be shared with their junior team, Racing Bulls.

Understandably, if Mercedes’ performance sinks in the 2026 F1 season, they will be taking other teams along with them. This will be a major setback for the reigning champions and for Mercedes, who were initially expected to set the engine performance benchmark in 2026.