New Audi SQ7 set to keep petrol V8 and Australia will get it

In a surprise development, Audi Australia is set to keep V8 power alive in its large SUV line-up, with the next-generation SQ7 expected to be locked in despite mounting pressure from Australia’s New Vehicle Efficiency Standard (NVES) laws.

While the SQ7 V8 was initially planned only for the United States, the high-performance version will now be sent to select additional markets, including Germany and Australia.

A crack plan at Audi Australia to offset the CO2 emissions of the V8 model by adding a low-carbon PHEV powertrain and cleaner V6 diesel models has unlocked the ability to keep the SQ7.

Audi will soon reveal a new high-performance SQ7 model to supplement the standard grades of the third-generation Q7 unveiled in Germany earlier today.

The new SQ7 will retain 4.0-litre twin-turbo V8 petrol power, likely with the addition of a stronger 48-volt mild-hybrid system dubbed MHEV Plus that should reduce its CO2 emissions by five to 10 per cent.

Fitment of MHEV Plus, which can produce 18kW/370Nm on its own but the SQ7 increases in performance with outputs of 440kW/800Nm.

While the new-generation Q7 was always going to offer a faster SQ7 grade, tightening emissions regulations in Europe and Australia meant the V8-powered model was set to be directed mainly to the United States.

But pressure from key Audi Sport markets, including Australia – which frequently sits in the top five global markets for Audi S and RS models by sales – has changed the situation.

“With the regulations we have [and] NVES, we consider everything around it as a total business case. Our customers love performance cars, and we know that our S and RS models perform extremely well,” Audi Australia head of product Matthew Dale told carsales.

Dale said that technological improvements for the Q7 and the likely addition of a PHEV powertrain helped shape an SQ7 business case.

“MHEV Plus coming on the TDIs makes those more efficient and effective with NVES. If we were looking at the PHEV as part of that business case, both of those concepts help us and assist us with positioning more performance-focused engines,” he said.

The outgoing SQ7 consumes 11.9L/100km and produces 271g/km CO2 – triple the limit that will apply from 1 January 2027, and even with MHEV Plus, the V8 will be in the red.

However, carmakers can avoid or reduce NVES penalties if they offset sales of their higher-CO2 models with sufficient volumes of PHEV and EV models.

Some degree of NVES ‘tax’ may still need to be rolled into the price, which could see an increase beyond the outgoing SQ7’s $174,815 tag (before on-road costs).

While the size of the new SQ7 will be nearly identical to the outgoing car, its underpinnings are modernised through a transplant to Audi’s new Premium Platform Combustion chassis.

Expect adaptive air suspension to be standard, while all-wheel steering and a dynamic package with active anti-roll control are expected to make an appearance, but the fitment of a rear limited-slip differential is in doubt after the feature failed to return in the new SQ5.

Audi Sport cues will also return outside, including quad exhaust outlets, large 22- or 23-inch wheels, and either matte aluminium or gloss black exterior trim. Inside, red, black or light grey themes are likely, with Audi Exclusive customisation on offer.

While the US market gets a clear run thanks to freer emissions regulations, key Audi markets like Germany and Australia have found a way to keep selling a V8-powered SQ7 model for a bit longer.

There’s a good chance a new SQ7 will also be joined by a larger SQ9 that would likely also use a 4.0-litre V8. While no SQ9 has been confirmed, Audi recently revealed a camouflaged ‘Q9 prototype’ with the tell-tale four-tailpipe signature of an ‘S’ model.

Even if the CO2 numbers work out for the next few years, the longer-term future of the V8 models is harder to predict – unless regulations change.

A PHEV system might need to be fitted to the V8 engine later, as Bentley and Porsche already do within the Volkswagen Group.

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