Automakers are being asked to do more with less, building smaller engines that deliver as much or even better performance than their larger predecessors. The boss of Mercedes-Benz performance division AMG told AutoCar that a 4.0 liter twin-turbo V8 would replace the 5.5 liter unit in current models, and the big V12 engine would be coupled to a hybrid drivetrain.

That’s the word from the aptly-named Tobias Moer, who went on record as saying the smaller V8 engine will be under the hood of Mercedes vehicles currently using the 5.5 liter motor. Despite being about 25% smaller though, output and performance should on par with the outgoing engine, though don’t look for any AMG hypercars, diesel, all-wheel drive, or new Black Series vehicles from AMG anytime soon. With the Mercedes S 500 Hybrid and B-Class Electric just getting on the road, the automaker is moving slowly but surely into the world of plug-in vehicles.

Instead, the in-house tuner is focusing on its core business of high-performance luxury machines, as well as re-engineering the long-serving BiTurbo 6.0 liter V12 engine, which made up to 621 horsepower and 738 lb-ft of torque. Add to that a couple of powerful electric motors (which is being forced by more stringent emissions standards the world over) and you could easily see an 800-horsepower hybrid Mercedes in the not-too-distant future. AMG has also admitted to working over smaller four-cylinder turbo engines, and it is more than just dabbling in perfomrance hybrids.