Mercedes AMG F1 non-executive chairman Niki Lauda says he isn't satisfied with how Mercedes has performed this week.
The German outfit brought a revised W08 to Barcelona for the second week of testing, but Lauda revealed that the updates have not lived up to their expectations so far.
"Personally, I'm not entirely happy," Lauda told RTL.
"We tested a few updates which didn't work out as we had expected them to. This is why we need to test again, tomorrow, too.
"We have to make further changes in order to understand how the car moves around the circuit in the fastest way possible. I'm sure we can solve these problems for Melbourne."
Ferrari's new SF70H gave the Silver Arrows a run for its money on Thursday with Vettel beating Valtteri Bottas benchmark lap time, while obviously keeping the full potential of the car under wraps.
Lauda isn't making any projections but insists the season won't be a simple walk in the park for Mercedes.
"Mercedes is facing a tough year. But we will give our best. I'm optimistic," said the F1 legend.
"The first three races will give us an idea. After that we'll have an understanding of how the competitive order looks like.
"I think Ferrari, Mercedes and Red Bull are close together, within maybe two or three tenths. So the field got closer, which is great. This is good news for the season opener."
The Austrian has been pleased however with what he has seen so far from new recruit Valtteri Bottas and how he has settled in at the Brackley squad.
"Valtteri edged closer to Lewis' qualifying performance. He's missing only two tenths now. This is good," he said.
"He still has to evolve in the long runs. However, he drives the Mercedes for the first time. He has to work a lot to learn all these things. Up until now I'm more than happy with him."