What happened: Lewis Hamilton confirmed that both Mercedes and Ferrari have been granted upgrade tokens to improve their power units under the Additional Development and Upgrade Opportunities (ADUO) system. The FIA mechanism allows teams trailing the benchmark engine to introduce performance updates that are typically restricted under the current homologation freeze.

Why it matters: The decision comes after the first 2026 assessment window identified Red Bull-Ford as the benchmark power unit. Ferrari, trailing by over 4%, receives two tokens, while Mercedes receives one for a deficit between 2% and 4%. This regulatory 'safety net' is designed to prevent long-term dominance and maintain competitive parity in the new engine era.

What to watch: Teams are expected to begin development immediately, though the performance impact may not be seen until late 2026 given the 8-10 month lead time for engine components.