Autocar claims this new 4.0 liter powerplant is good for 450-600 horsepower depending on the state of tune which certainly makes sense. Mercedes can wait to see what BMW does with the M3 and then simply up the output. Considering that the new M3 will have a fairly small inline-6 motor, Mercedes and AMG will still have it outgunned even with a 4.0 liter V8.
This new motor is set to eventually replace the SLK55's M152 V8. The M152 is not a bad motor but it's a step back from the M156 V8 the C63 currently has. It would seem the M152 was simply a stopgap engine until this new motor came out which shows in its design which is simply the M157 5.5 liter Twin Turbo V8 used currently in the 63 AMG's just without the turbos. That also means without a lot of the fun.
Mercedes could give the C63 the M157. They could even give the SLK the M157. These comparatively lightweight cars in relation to the E, S, SL, etc., with the M157 though would eat everything else in the lineup alive.
This new motor is apparently confirmed in a quote form the LA Auto Show by AMG boss Ola Kallenius, "We’ve already had downsizing to 5.5 and sophisticated direct-injection technology – we’ll see more of that in the future. We’ve already gone down to 5.5 and that's the technological road we’re on."
So a 4.0 liter twin turbo V8 is not as exciting as a 5.5 liter twin turbo V8 but with all wheel drive and a dual clutch transmission it certainly will still have quite a bit of muscle.