Next Audi SQ7 set to retain V8 despite NVES

AUDI Australia is preparing to retain V8 power in the next-generation SQ7 despite the tightening emissions position created by the New Vehicle Efficiency Standard (NVES), with the high-performance large SUV expected to be secured through a wider Audi portfolio offset strategy.

The new SQ7 has not yet been formally revealed, but GoAuto understands the performance derivative of the third-generation Q7 will continue with twin-turbocharged 4.0-litre petrol V8 power rated at 440kW/800Nm and is being prepared for Australia after earlier expectations that the model would be focussed on the United States.

The decision is significant because the SQ7 V8 sits in a highly exposed part of the market under NVES laws – large, high-output, ICE-powered SUVs that deliver strong brand value, but carry high CO2 emissions numbers that sit well above headline limits.

Rated to consume 11.9 litres per 100km while emitting 271 grams of CO2 per kilometre, the outgoing SQ7 V8 already has a mild hybrid system but emits about three times the relevant 2027 NVES headline limit.

While the SQ7 is expected to gain further electrification in the form of Audi’s MHEV Plus technology, which provides more assistance to the combustion engine, the SQ7 may still emit around 250g/km and would need to be managed as part of Audi’s broader fleet emissions position.

“With any engine in this current environment in Australia with the regulations we have and NVES, we also consider everything around it as a total business case,” Audi Australia head of product Matthew Dale told GoAuto.

“Our customers love performance cars, and we know that our S and RS models perform extremely well, and we’re knocking on the top five constantly or within the top five globally for performance cars.”

Hot local demand for the SQ7 gives Australia a stronger case for continued access to models like it, even as the emissions costs of these vehicles becomes harder to absorb or offset.

The outgoing SQ7 produces 373kW/770Nm from its petrol V8 and the new, more powerful model is expected to remain positioned as an alternative to rivals like the BMW X5 M Competition and Mercedes-AMG GLE 53 and GLE 63 S.

Planning for the broader Q7 range has played an important role in shaping the SQ7 business case in Australia.

The standard model will launch with two V6 TDI engines (with MHEV Plus) in late Q1 2027, with a petrol V6 PHEV under close evaluation to join the lineup.

“With mild hybrid plus coming on the TDIs, it makes those more efficient but effective with NVES,” added Mr Dale.

“If we were looking at the plug-in hybrid as well as part of that business case, both those concepts help us and assist us with positioning, say, a more performance-focused engine.”

Mr Dale said Audi already used a similar portfolio approach with the current Q7 and Q8 families, including Q8 plug-in hybrid volume helping offset higher-emitting SQ8 and RSQ8 Performance derivatives.

That approach is likely to become more important as Audi Australia increases the contribution of BEV models such as the Q4 e-tron, Q6 e-tron and e-tron GT, while also rolling out more PHEV and mild-hybrid combustion models.

However, the SQ7’s continuation does not mean V8s are insulated from future regulatory pressure. Some NVES cost may still need to be reflected in pricing, with the outgoing SQ7 listed from $174,815 plus on-road costs.

The longer-term future of a pure petrol V8 SQ7 is also less clear, particularly as other Volkswagen Group brands have already moved to V8 plug-in hybrid performance systems in upper-luxury and performance SUV applications.