Audi's preparations to enter Formula One in 2026 are picking up speed and a prototype power unit will run on the test bench before the end of the year, the German manufacturer said on Tuesday.

The Volkswagen-owned brand announced last October that it was taking a stake in the Sauber Group, whose Swiss-based team are competing this season as Alfa Romeo with Ferrari engines.

Formula One will have a new power unit from 2026, with the focus on sustainability and a more cost-efficient future, when Sauber will become the factory Audi team.

Speaking at presentation in Shanghai, Audi board member Oliver Hoffmann said the Formula One project had "really taken off in recent months."

More than 260 specialists were already working at the powertrain facility in Neuburg an der Donau, near the carmaker's headquarters at Ingolstadt, with the core of the development team coming from existing Audi staff.

"They are joined by specialists with Formula One expertise who have been sourced externally and will strengthen the team in a targeted manner," Audi said.

"By the end of the year, the hiring of staff should be completed, and the team will consist of more than 300 employees."

Audi started testing a single cylinder prototype for its engine last year and this year will run its first full hybrid drivetrain on a test bench that will go on to "form the basis for the future vehicle concept".

New regulations coinciding with Audi's entry in 2026 will see a more powerful hybrid element responsible for up to 50 percent of power output as well as a switch to synthetic sustainable fuels for the V6 engine. However, the complex MGU-H technology that exists on the current power units and assists the turbocharger will be scrapped after 2025.

Audi also announced that its dynamic development simulator in Neuburg will be brought up to "Formula One standards".