I believe the cost are going to be much lower for a company with the expertise of Cosworth.
http://www.autosport.com/news/report.php/id/86722?
Tim Routsis, Cosworth CEO wrote:We have very ambitious plans for developing the Cosworth offering for 2013, and we certainly want to be with teams throughout the grid. We want to be winning again. We want to be with teams capable of winning the world championship. That's why the relationship with Williams, and other relationships, will be very important to us.
There's a recognition throughout the grid that there isn't a significant performance advantage to be had, but reliability varies tremendously across the engine providers, and we've got the most reliable engine, and that's very attractive. We not only provide an engine that's competitive and reliable, but actually is produced very economically. We provide a very good financial solution as well. You don't need to be a rocket scientist to figure out teams are very interested.
Companies like Ferrari have got used to utilize resources on an unlimited scale that they do not know any more how to get good results cost effective. Domenicali confirmed this only a month ago when he referred to the RRA and how Ferrari's gestione sportiva must change when they have to operate on a third of the resources they used to have.
http://www.auto-motor-und-sport.de/form ... 22803.html
Stefano Domenicali, translated by WB wrote:In the past we have worked completely target oriented. Money was no issue. Now we have to get by with fewer people, less tools and less money. We must balance the result against the costs, we have to set priorities. This requires an entirely new way of thinking from us, another culture.
There have been several comments that Ferrari is planning to switch their best redundant engineers from gestione sportiva to the engine department in December. So it would not surprise me if they are operating with budget figures as they have in 2005 when the last big engine redesign was done.
I bet that Cosworth is planning to do this development for a third of what Ferrari does and that their planned margin on the supplied engines would be way bigger than Ferrari's. They also think they can be a supplier to WCC teams and that their engines will be in great demand by other teams. You also have to put this into perspective with other propulsion projects like big aircraft turbines where the break even point comes only after 25 years. I'm not saying that such times would be applied to an F1 project but 8 years seem to be quite ok to me. F1 is unlikely to make any formula changes any time sooner than 2025 if this one is done properly. The engine will not be the focal point of developments and they can play with boost and rpm to adjust it to whatever other factors come along.
Regarding companies like Ferrari and Mercedes they have proven times and again that their engine departments and engine companies were allowed to run budgets exceeding € 100m in the past with very little if any income from customer sales. MBHPE Ltd. and the Stuttgart group of engine engineers that later got amalgamated in Brixworth probably had a budget of € 180 m in 2005 and they did not charge anything to McLaren. They regard it as promotional cost for the brand as long as they are successful.
If VW incurre an initial cost of € 100 mil for getting into F1 of which they may recover 30 or 40 mil over some years and then continue without further cost they may consider that a nice deal. Honda and Toyota payed billions to get their names on F1 cars and never had the chance to break even after an initial investment.
There are different way how the cost of an F1 engine program can be justified but all of them have winning races in mind. If F1 continues as it does at the moment more engine suppliers actually get a chance to win races than they had for a long time before.