This is engine downsizing taken to the extreme.
Downsizing has been something that all automakers are doing. Most have taken it in small increments by simply reducing displacement or by cutting out two cylinders at max and then turbocharging the engine to make up for the lost power. However Audi is taking it a few steps further with its supercar, the R8. Instead of cutting out two cylinders and then using a turbocharger like the Acura NSX or the Ford GT, Audi is replacing the 4.3-liter V8 with the turbocharged 2.5-liter inline five-cylinder engine that is used in the RS3.
Audi will make the engine more powerful and noisy, but there is no word on whether or not it will be supplemented by a hybrid drivetrain built from the E-Tron parts bin. The five-cylinder in the RS3 makes 362 horsepower, so it will need some way to increase this by at least 100 horsepower in order to match the current Audi R8's 460 horses. This entry level R8 will not interfere with the V10 version, but it would be interesting to compare the two cars side by side. We thought Ford was pushing it when it claimed that a twin-turbo V6 could be as good as its V8 and V12 peers, but Audi seems to be confirming that the era of small engines in fast cars is here. At least there will still be plenty of horsepower to go around.