Mercedes boss Toto Wolff says engine manufacturers cannot be "charitable" with how much money they charge customers for a power unit.

The FIA has joined forces with F1 boss Bernie Ecclestone to push for a budget engine for 2017 after Ferrari vetoed the governing body's attempt to introduce a cost cap to reduce engine bills for non-manufacturer teams. An engine and gearbox deal currently costs around €20 million a year, with the FIA originally hoping to reduce that to €12 million.

Ferrari argued it should not have the cost of its product dictated by the FIA. Wolff agrees with this opinion and points to the fact Mercedes currently loses money in its supply deals with Williams, Force India and Lotus.

"We already lose money on the engine side, substantial," Wolff said. "The question is how much more do we lose if we continue to subsidise those engines to some of our partners.

"Partners expect to have the most competitive engine and in order to have the most competitive engine, because its a competitive environment, we spend very substantial amounts in developing those engines. Nobody has ever asked us how we plan to recover those or if someone can contribute to help us to recover.

"You can argue whether the marketing benefit of the development spend is right or wrong but as a matter of fact we live in a world where we are all facing a commercial reality and that commercial reality is that we need to be as efficient as possible and try to recover the best possible amount."

The proposed budget engine would be in the region of €6-7 million. Wolff says Mercedes is willing to talk to the FIA about a compromise around its original suggestion of cutting engine costs.

"I think you cannot expect any stakeholder in the sport to have a charitable approach, but you have to just -- although optimising your own situation -- find a compromise for the sake of the sport.

"I think that it is perfectly legitimate for the FIA to try to convince the power unit manufacturers to reduce the price, because the better the price the more easy it is for the smaller teams to make the numbers. I can understand their position, but on the other side as engine manufacturers, we have complied to these new regulations, we have developed these engines, and they are based on a business case.

"Part of the business case is the income side. So if that changes now, it changes our figures - and this is why it is different interests. But, for the benefit of F1 in general, we need to have that conversation."