Although unsuccessful in Formula Two, Kauhsen decided to enter Formula One in , and after failing to secure a deal to run the Kojima cars used in the 1977 Japanese Grand Prix, Kauhsen spent 1978 designing their own chassis. Bringing in designer Klaus Kapitza from Ford, Kauhsen planned to construct a copy of the Lotus 79, a car that had dominated the 1978 championship due to the use of ground effects. Apart from the chassis, Kauhsen bought the rest of the components from suppliers, including the Cosworth DFV engine utilised by the majority of the teams at the time, and an outdated five-speed gearbox from Hewland. Having planned to follow the then-advanced use of ground effects by Lotus, initial testing of the prototype revealed fundamental design issues; the designers failed to take account of the variable ride height of cars during braking and acceleration, stopping the ground effects functioning correctly. These problems forced the team to redesign the entire car, bringing in drivers Patrick Nève and Harald Ertl to develop a new car with the limited funds available in the months before the Formula One season was to begin.