The diesel eight-cylinder engine under the hood of the SQ8 has a displacement of 4.0 liters and is equipped with a twin combined supercharging system. In the lower rev range, air is forced into the cylinders by an electrically driven compressor, while in the upper range a traditional turbocharger kicks in. This engine produces 431 hp and 900 newton-meters of torque.

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In addition, the SQ8's powertrain is a hybrid system. The internal combustion engine is assisted by an electric motor-generator with a power output of 8 kilowatts. The engine is paired with an eight-speed ZF automatic transmission, and power is distributed to the wheels via the proprietary quattro all-wheel drive system in a 60:40 ratio. The SQ8 accelerates from 0 to 100 km/h in 4.8 seconds, and the top speed is electronically limited to 250 km/h.

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The SQ8 also features adaptive air suspension with adjustable dampers. As an option, the car can be ordered with a fully steerable chassis with rear-wheel steering, as well as an additional sport package that includes active anti-roll bars and an electronically controlled rear differential.