Charles Leclerc said he was "positively surprised" by Ferrari's performance after coming third in Sunday's season-opener in Melbourne but admitted a lot of work was needed to reel in Mercedes.
The Monaco driver started fourth on the grid but had a lightning start to surge past pole-sitter George Russell and his Mercedes teammate Kimi Antonelli.
It sparked a thrilling battle with the lead changing hands multiple times before Mercedes had a better pit-stop strategy, then used sheer pace to pull clear and take the top two places.
"Very pleased is maybe a big word, but I am positively surprised, for sure, after qualifying yesterday," said Leclerc, who saw Ferrari teammate Lewis Hamilton finish a place behind in fourth.
"I think yesterday we were not in our optimum window, but we are still very, very far off the Mercedes in qualifying, in the race, though we seem to be closer.
"It doesn't mean we are the fastest car, but we are more reasonably behind. So lots of work to be done.
"And I think this championship, anyway, will be won by development and upgrades.
"We've got plenty coming," he added. "I'm sure all the others do too, but hopefully we are on the better side of things."
The Melbourne race was essentially won when both the Mercedes pitted during an early virtual safety car phase and the Ferraris stayed out.
When the Scuderia pair made their stops, they emerged behind Russell and Antonelli, gambling that the Mercedes pair would need to go in again for fresh tyres.
But they kept going and there was no way back for Leclerc.
"I don't regret it. It was a conscious choice," he said.