Formula 1 released its midseason engine report card this week, and the team sitting at the top is the one complaining loudest. The FIA’s own numbers say Red Bull Powertrains builds the fastest internal combustion engine on the grid. Red Bull’s team principal says that is not true. So does the man running Mercedes. When the supposed winner and its closest rival both think the ranking is wrong, the real story is not which engine is fastest. It is what happens when a sport builds a grading system that only checks half the homework.
The FIA confirmed the results of its second Additional Development and Upgrade Opportunities review on August 26, covering rounds six through eleven of the season, Monaco through Hungary. The verdict changed nothing. Red Bull-Ford remains the reference internal combustion engine on the grid. Mercedes stays in the band two to four percent behind and keeps the single upgrade allowance it banked after the first review period. Ferrari, Audi and Honda remain more than four percent off the pace, holding two additional homologation opportunities apiece for this year and two more for next. Red Bull gets nothing, again, because these rules only reward whoever is measured as behind.
A Grading System Built From an Old Scar
ADUO stands for Additional Development and Upgrade Opportunities, and 2026 is its first season on the books. It exists because F1 just tore up its own power unit rulebook. The new engines split output roughly evenly between the combustion engine and the electric motor, drop the old MGU-H entirely, and get built under a hard cost cap. Once a manufacturer locks in that design, homologation rules normally freeze it in place for the rest of the cycle, which runs through 2030. Get the fundamentals wrong in year one, and a manufacturer can be stuck with the consequences for five years.
The FIA has a specific memory driving this decision. When the last hybrid formula launched in 2014, Mercedes got the architecture right and its rivals did not. The development freeze meant to control costs instead locked in a competitive gap that took the rest of the grid the better part of four seasons to close, working with little more than a handful of in-season tokens. ADUO is the FIA building a release valve into the freeze this time. Fall far enough behind on a defined Internal Combustion Engine Performance Index across three review windows each season, and a manufacturer earns the right to reopen its homologated design, plus real money to help pay for the work, without breaching its budget cap.
The Engine Nobody Expected to Win
Here is the detail almost nobody outside the paddock is talking about. Red Bull Powertrains had never designed a complete Formula 1 engine before this year. For two decades Red Bull built chassis and bought engines from Renault, then Honda. The 2026 rules forced it to become a full manufacturer overnight, in partnership with Ford on its first F1 works return in twenty years. Ford’s willingness to bet on that program fits a broader shift at the company under CEO Jim Farley, who has spent the past two years pushing Ford to compete on engineering substance rather than badge value alone. And in its first graded season, that untested operation topped the ICE performance index, ahead of Mercedes, Ferrari and Audi, three manufacturers with decades, or in Audi’s case a fortune, of turbocharged hybrid experience behind them. That is one of the more remarkable engineering results in the sport this decade, and ADUO is treating it as a penalty.
Ferrari, fresh off a record revenue year that funded some of the largest employee bonuses in company history, still sits more than four percent behind on the one metric that determines catch-up money. Audi, making its F1 debut this year as a full works manufacturer, sits in the same band. Neither company’s budget closed the gap on its own. Red Bull’s engineering did, on the first attempt, and the reward was a rule that lets three better-funded, more experienced rivals keep developing while Red Bull cannot.
The FIA Graded Half the Engine
Here is the part that should bother anyone who understands what a 2026 power unit actually is. The ADUO index measures the internal combustion engine alone: cylinder output, torque, boost delivery. It does not measure the MGU-K, the battery, or how a team deploys electric power over a lap, even though the 2026 regulations were written specifically to make electric power roughly half of a car’s total output. The FIA itself has acknowledged that the index is not representative of full power unit performance. The FIA didn’t rank the best power unit. It ranked the best half of one.
That distinction is exactly why Mercedes team principal Toto Wolff and Red Bull team principal Laurent Mekies found themselves agreeing on something in public this season. Both said Mercedes fields the most powerful power unit on the grid, ICE rankings notwithstanding. If the two men running rival engine programs agree the electric side of the equation matters more than the FIA’s own catch-up formula accounts for, that is not a minor technicality. It is a gap in the grading system large enough to swallow half the argument, and it means the fastest lap and the official ranking can point in different directions at the same race.
Being “Behind” Just Became a Business Strategy
None of this would matter much if ADUO were only about bragging rights. It is not. Under F1’s cost cap, a manufacturer measured two to four percent behind receives cost cap relief worth up to three million dollars and 70 additional hours of dyno testing. Fall four to six percent behind and that rises to four million six hundred fifty thousand dollars and 100 hours. Six to eight percent behind brings six million three hundred fifty thousand dollars and 150 hours, and eight to ten percent behind is worth eight million dollars and 190 hours, according to F1’s own published breakdown of the regulations. A gap of ten percent or worse is worth up to eleven million dollars in relief. FIA single-seater director Nikolas Tombazis has described the whole framework as a cost cap relief mechanism, not a competitive equalizer. Under a hard spending cap, extra money to develop an engine is a competitive equalizer, whatever label the FIA prefers.
Run the math and the incentive gets uncomfortable. Being ranked as the best ICE on the grid currently earns Red Bull Powertrains nothing beyond bragging rights. Being ranked as merely good earns a rival millions of dollars in budget headroom to spend anywhere else in its power unit program. A cost cap is supposed to force every manufacturer to spend the same amount chasing performance. ADUO quietly reopens that gap for whoever the index decides is behind, and the index only looks at half the engine.
This Is Not Just an F1 Problem
Cost caps and development freezes are not unique to Formula 1, and neither is the tension ADUO is trying to manage. NASCAR froze much of its Next Gen car’s parts list to control spending, then had to build a separate supply pipeline to keep smaller teams stocked, a decision that has already produced lawsuits over who pays for what. IndyCar leases engines instead of letting manufacturers sell them outright, specifically to stop one manufacturer from pricing a rival out of the series. IMSA’s GTP class runs an explicit Balance of Performance system on its hybrid prototypes for the same underlying reason F1 built ADUO: freeze the engineering to control costs, and somebody has to keep the racing honest afterward. Every series that caps spending eventually has to answer the same question. Who decides what “behind” means, and what happens once they do.
What Actually Matters Here
F1 has already signaled that ADUO will change. Tombazis called this year’s version a first attempt, something to evolve in discussion with the manufacturers. The specific bands, the dollar figures, the three-window calendar, all of it can be rewritten before 2027. What will not change is the underlying arrangement: a spending cap that freezes engineering, and a committee that decides who gets to unfreeze it. Red Bull built the best combustion engine on the grid in its first year as a real manufacturer and got nothing for it. That is either the system working exactly as designed, or proof that it is measuring the wrong half of the engine. Based on what two rival team principals have said out loud this season, it might be both.