Lewis Hamilton said his Mercedes team need to improve if they are to beat Ferrari in their developing fight for the Formula 1 title.
Hamilton was beaten into second place in the Bahrain Grand Prix as Ferrari's Sebastian Vettel took his second win in three races this season.
He said: "They are strong in race trim and we particularly struggle with the rear end. It's difficult to explain.
"They did a great job and we have to make improvements."
Hamilton is seven points behind Vettel after winning in China and securing two second places behind the German.
The three-time world champion added: "It is all small, fine percentages that will make the difference between winning and coming second."
Hamilton apologised to Mercedes for damaging his chances by earning a five-second penalty for deliberately slowing Red Bull's Daniel Ricciardo as they pitted for fresh tyres under a safety car early in the race.
But he said he was not sure whether it cost him victory in a race he lost by 6.6 seconds, and in which Vettel said he was measuring his pace once he was in front.
"Possibly I would have been in a better position," Hamilton said, "but that's all ifs and buts."
The Englishman, 32, will get his next chance to overhaul Vettel at the Russian Grand Prix in Sochi later this month.
"I feel pain in my heart (when I don't win) and people will be like 'hey, you finished second, you should be happy', but that's not why we exist," said Hamilton.
"If anyone ever thinks that a driver, or I, should feel happy with second, I don't know what to say. That's not why we exist."
He added: "The disappointment is there and losing points for a team, when you could have won the race, is definitely painful, but I gave it everything I could.
"Ferrari did a great job, but we are going to push hard together - re-gather as a team - and come back fighting."
Vettel refused to be drawn into talk about a title challenge.
"I am not really looking at the championship," the four-time champion said.
"I am really enjoying the car. I was a bit down after qualifying because the gap to Mercedes was so big and we could have been a bit closer.
"But something inside me told me we had a good car and we can do well, so right from the first lap I felt the car was there and the Easter hunt was on.
"They were hiding some eggs but it looks as though we found them today."
Ferrari have bounced back this season from a winless 2016 to have arguably the fastest race car this season following a major change in regulations.
But they have missed out on pole position in all three races. In Bahrain, Hamilton and team-mate Valtteri Bottas gave Mercedes their first front-row lock-out of the season, with the Finn ahead on his first career pole position.
When it was suggested to him Ferrari had an advantage over Mercedes at this stage of the season, Vettel said: "Maybe at the moment but we still have lots of work ahead of us.
"The car is very good in the race but not quick enough to match them in qualifying.
"There is a lot of homework ahead of us but these kind of results certainly help. The people are very happy, they're passionate and full of energy to keep working harder."