Development of the chassis and the car had allowed to increase capacity to more than 4 litre, and output of the new engine version M25C[13] was well over 400 hp.

The W125's supercharged engine, with 8 cylinders in line (94.0 x 102 mm) and 5,662.85 cc (345.56 CID), attained an output of up to 595 horsepower (444 kW) in race trim.

In 1938, the engine capacity of supercharged Grand Prix cars was limited to 3000cc, and the W125 was replaced by the Mercedes-Benz W154.

In Grand Prix racing itself, the figure was not exceeded until the early 1980s (when Grand Prix racing had become known as Formula One), with the appearance of highly powerful turbo-charged engines; such as the Renault EF-Type engine, BMW M12/13, and the Ferrari Tipo 021.

Named the M125, the engine was also fitted with a Roots type supercharger producing 632 lb⋅ft (857 N⋅m) of torque at the start of the season.

[17] For the 1938 season, Grand Prix racing's governing body AIACR moved from a formula limited by weight to one by engine capacity.