Mercedes has admitted that it is falling clearly behind Ferrari in engine power.

Lewis Hamilton's main problem in Hockenheim qualifying was a hydraulic failure, but arguably a bigger issue is that Ferrari has made huge strides with its power unit.

"That's correct. We are behind Ferrari in that area now," said team boss Toto Wolff.

Hamilton said at Hockenheim that the deficit on the straight is three tenths.

"Actually it's about five tenths," Wolff said.

"Of course we didn't expect it but in Formula 1 you need to be ready for literally anything," he added.

Many paddock insiders are surprised with how quickly Ferrari raced ahead in the power stakes. Auto Motor und Sport said that one analysis showed that between one race and the next, the increase was almost 40 horse power.

"That's how much you usually find in two years," one insider said.

Wolff agreed: "It cannot be the combustion engine."

2016 world champion Nico Rosberg has a theory, explaining at Hockenheim that a technology trick with the turbocharger means that Ferrari has extra use of the battery.

However, there are suspicions that it may not be legal.

Renault boss Cyril Abiteboul wants the FIA to react by mandating standardised energy management software.

"That would rule out any suspicion," he said. "Unless it is possible to clearly know if a technology is legal or not, you have to standardised it."

Ferrari enjoy a 20-point lead over Mercedes going into this afternoon's German Grand Prix.