Mercedes team principal Toto Wolff has confirmed the manufacturer would be willing to drop the MGU-H in future engine regulations if certain 'compromises' can be agreed.
Formula 1 will introduce new power units from 2026, the details of which currently remain undecided.
Talks have been ongoing in recent months with representatives of all current suppliers present as well as those on behalf of the Volkswagen group.
Although there is a consensus that the current units are are too expensive, finding a way to reduce costs while not devaluing the capital already invested by suppliers appears to be proving difficult.
Following the latest round of talks in Italy, Wolff said: "The MGU-H is going to be dropped if we can find alignment of many other points.
"I think it is a compromise that at least... I cannot speak for anybody else but for Mercedes, we are prepared to enter in order to facilitate the entry of the Volkswagen group but there are several other topics where compromise needs to be found.
"If a compromise cannot be found, we will probably revert to the governance and have 2026 regulations that the FIA and FOM come up with."
F1 power unit discussions progressing "positively"
Ferrari team principal Mattia Binotto confirmed the universal agreement that the MGU-H would be scrapped ahead of the introduction of the new specification units.
"A lot of discussions have happened since the last meeting in Austria, the next steps in defining the future of the power unit," said Binotto.
"So far the discussions have been positive, all of the manufacturers agreeing to remove the MGU-H, and we are in agreement with that.
"There are a lot of details still to be discussed and agreed but generally speaking the discussion is positively on moving."
What do you think?
Come on guys, we are F1 fans. I know this will upset the green tree huggers, but I really wish we would revert to the good old V8's. Cheap to build, doesn't need fancy and expensive electronic systems. And oh boy don't they just sound great as well. Lets bring the thrill of old fashioned racing back.
GPFans is a multi-platform, multi-language brand dedicated to Formula One coverage. We bring you all the ins and outs of the sport, 24/7, everything from up-to-the-minute news and features to the latest viral stories and clips.
We believe that a new generation of exciting, outspoken drivers will make F1 more popular than ever before, and we want to give our users access to as much of their heroes as possible, on and off the track. From Lewis Hamilton to Max Verstappen, Daniel Ricciardo to Sebastian Vettel, we provide in-depth analysis of every every Grand Prix in the season, from Australia to Abu Dhabi.
With Formula One under the new ownership of Liberty Media, how the sport is being covered is evolving, and GPFans will look to be at the heart of this progression into new media, as one of the fastest-growing sites covering the king of motorsports.