The German manufacturer has endured a difficult 2023 campaign where, despite finishing second in the constructors' championship, it proved to be no match for the dominant Red Bull team.
It realised early on that it had made a wrong decision with its car's aero platform but, despite making major changes from the Monaco GP, it was not enough to get back to the front.
The team has long been open that it will embark on a new design direction for 2024, but team boss Toto Wolff has now revealed the scale of the overhaul that is being worked on in Brackley.
"We are changing the concept," said Wolff. "We are completely moving away from how we laid out the chassis, the weight distribution, the airflow.
"I mean, literally, there's almost every component that's being changed because only by doing that, I think we have a chance.
"We could get it wrong also. So, between not gaining what we expect, catching up and making a big step and competing in the front, everything is possible."
Asked if there was a sense of optimism or scepticism about the new car design being enough to get Mercedes back to the front, Wolff said: " I have never in my life felt optimistic about anything.
"It may sound a bit miserable, but it's protected me about managing my expectations and just pushing harder. Because I think it's never good enough. That's why I sit here with a bittersweet feeling. We won P2 [in the constructors' championship], but we lost P1."
While Mercedes was able to celebrate finishing runner-up in the constructors' championship at last weekend's Abu Dhabi GP, Wolff said there remained some mixed emotions about the campaign.
Asked by Motorsport.com if ending the year second was something to celebrate or move on from, Wolff said: "I think we need to take it on the chin, be humble about it and consider it a good day. Nevertheless, there's a Mount Everest to climb in order to catch up with Red Bull.
"I have no doubt that McLaren is going to be right in the mix next year, and maybe Aston Martin and maybe others.
"We must leave no stone unturned, which we do in Brixworth and Brackley. And as tough as it is to be reminded that it's just P2, it's also a great, great opportunity to come back and strive for the stars."
