Valtteri Bottas has warned that Mercedes look to be in "their own league" in pre-season testing but feels Williams can take on Ferrari and Red Bull.
Tuesday's start to the second pre-season test saw Mercedes switch to the option tyres for the first time and immediately jumped up into P1.
While last week's four-days was spent racking up the miles, Nico Rosberg put in a low-fueled soft tyre run on Tuesday morning which yielded a 1:23.022.
That was the day's fastest lap time and it edged Bottas' ultra-soft tyre run by 0.207s.
"They are in their own league at this point – that is the fact," the Williams driver rued.
"At the moment it looks like they are in a really strong position.
"Where we are now it looks like it's going to be quite tricky for anyone to challenge them at the beginning of the season. That is a fact at the moment.
"We are doing our best to chase them, it's a long season, and we still have upgrades to come for Melbourne and hopefully they'll work well. Don't lose faith yet."
But while Mercedes may be on track to once again runaway with the titles, Bottas feels Williams could at least challenge Ferrari and Red Bull.
He added: "Mercedes is looking very strong, also Ferrari and Red Bull, but I think, you know, we are there or thereabouts with Ferrari and Red Bull.
"Difficult to say in detail, but today it was nice to push a bit more and see that the lap time was coming down nicely.
"So it was good, and we know we still have plenty more to come. But whether we'll be up there in Melbourne, I don't know yet."