Audi will join Formula One starting in 2026 as the Volkswagen Group brand bets it can bolster its business by competing in the popular racing circuit.
F1 racing intends to switch to cars running on synthetic fuel from 2026 as part of a plan to become carbon neutral by the end of the decade.
The new rules will bring greater electrification and the use of advanced sustainable fuel, with power unit manufacturers also subject to a cost cap from next season.
"We have decided to be a full electric car manufacturer and F1 has changed the rules in a way that we can enter," Audi CEO Markus Duesmann, who was previously involved in Formula One with BMW when it owned Sauber, told reporters on Friday.
Adam Baker, a motorsport veteran and former employee of Formula One's FIA governing body, will be the CEO of Audi’s F1 project.