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Originally Posted by bjohnsonsmith
Otherwise that all makes sense. However, by limiting the amount the engine sells for and therefore limiting the amount of development cost being sunk into the engine, isn't there the risk having a cheap engine but not necessarily a good engine, due to the lack of development?
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Only if you dictate that the engine has to be incredibly complex and expensive to engineer. Then you risk engine manufacturers not putting enough in, for fear of not making much back in sales. However, given that 3 of the current 4 engine manufacturers are also works teams, if they want to win they may sink more into it for an advantage, whilst not creating additional costs for the teams.
The worst case scenario is that they don't sink any money into it and the engines are rubbish. However, that's when this sort of setup begins to shine. With significantly cheaper engines it massively lowers the barriers to entry, thus anyone who has a team of engineers and wants to give it a go can do so, and attempt to build a better engine. This is something that isn't possible right now due to the extreme costs. It's the free market at work - stop a couple of companies having a monopoly and then others can compete too.
With engines at a price of an IndyCar engine, you open the market to manufacturers like Gibson, Judd, AER, Cosworth, etc. It would allow companies like Mecachrome to build an engine without huge funding backing from Renault.
You do have the possibility of the situation becoming Mercedes still spending millions on their engines, and the privateers using engines that can't compete with the Mercedes. But then that's what F1 has always had - a couple of good engines, and then 10-12 Ford V8s propping up the midfield back. At least this way it means there are options, fallbacks and affordable engines - which would also mean more stable teams, and a lower barrier to entry for a new team as well.