Volkswagen’s (VW) premium brands, Audi and Porsche, are set to join Formula One (F1) after convincing the car manufacturer the move would create a profit.

Commenting on the news, VW chief executive, Herbert Diess, said discussion by the board of directors about the two companies’ plans created some division, but ultimately, the brands, along with VW China, showed that a commitment to F1 could bring in more money.

Diess also said the new engine regulations in 2026 had a heavy impact on the decision.

“As Markus Duesman always tells me, you usually make up one second per season on a medium-sized race track simply by optimising details,” Diess said.

“But you can’t catch up on that when you join a new team: you need five or 10 years to be among the front runners.

“In other words, you can only get on board if you have a major rule change.

“That’s coming now, and it will also come in the direction of 2026, when the engines will be electrified to a much greater extent, including with synthetic fuels.

“That means you need a new engine development and you need three or four years to develop a new engine.

“That means you can decide now to do Formula 1 – or then probably not again for 10 years.

“And our two premium brands think that’s the right thing to do, and are prioritising it,” he said.

Audi is set to offer a reported €500 million (AU$739 million) for McLaren as a means to enter the competition, while Porsche is seeking a long-term partnership with Red Bull Racing, which will start in several years’ time.

The news comes after McLaren Racing announced a partnership with cryptocurrency platform, OKX.