Toto Wolff believes Mercedes was dealt the latest in a series of "tough lessons" this season at a chaotic Singapore Grand Prix.
The promise of a strong result came in practice and qualifying, with Lewis Hamilton matching Red Bull and Ferrari's pace and lining up third on the grid at the Marina Bay Street Circuit after finishing 0.054secs down on pole-sitter Charles Leclerc.
But the race turned into a miserable two-hour journey, starting with Hamilton being forced wide at turn one by the second Ferrari of Carlos Sainz following a slow start.
The seven-time F1 champion later made two mistakes, the first costing him a front wing when ploughing into a barrier, and the second a failed late lunge on Aston Martin's Sebastian Vettel that led to him trailing home ninth.
Offering his own assessment on what trackside engineering director Andrew Shovlin described as "a race to forget", Wolff said: "This season has given us several tough lessons - and [Sunday] was another one.
"We started from opposite ends of the grid with our two cars, but we couldn't capitalise on the car's race pace with either of them when it came to an end result.
"Lewis was fighting for the podium for much of the race but also battling a car balance that was on a knife edge, in difficult conditions and on the bumpy surface.
"After he locked up and damaged the wing, the stop to change tyres and the nose cost him positions, then he lost out even more when cars ahead pitted under the safety car and jumped ahead.
"That left him stuck in a train of cars on very similar aged tyres, and he couldn't make up any ground."
George Russell's woes began on Saturday with a technical issue causing trouble under braking and through corner entries and leaving the Briton in 11th.
After a power unit change triggered a pit lane start, Russell struggled to make progress in the wet opening stages of the race.
A gamble in switching early to slicks failed to pay off before contact with Mick Schumacher's Haas left Russell outside of the points.
"We rolled the dice on dry tyres when he was running out of the points," said Wolff. "In hindsight, it was clearly too early, but he had nothing to lose, so we were prepared to take the gamble.
"Even so, as the race unfolded, he was still on course to make it back to the points until the collision with Mick, which put him last on the road.
"The biggest frustration is that we couldn't build on the signs of competitive performance we saw in FP2 and in qualifying."
With Ferrari securing a double podium, Mercedes' hopes of clinching second in the constructors' championship is now a steep climb as it trails the Scuderia by 67 points.
But refusing to give in, Wolff added: "The only thing to do is to collect ourselves and throw our energy into the next race in Suzuka to rebuild momentum."