Kauhsen began his professional life as a freight forwarder before transitioning to motorsport competition in the 1960s. He contested touring car and sports car races regularly from 1963 to 1974. His first major title came in 1967 when he won the European Touring Car Championship driving an Abarth 1000TC — a small-class entry that nonetheless secured him the outright championship.
Kauhsen joined the Porsche factory program and demonstrated particular strength in long-distance endurance racing. In 1968, he and Herbert Linge and Dieter Glemser won the 84-hour Marathon de la Route in a 170 hp Porsche 911S. That same year, he won the Spa-Francorchamps 24 Hours together with Erwin Kremer and Helmut Kelleners.
His Le Mans record spans several important Porsche factory efforts. In 1969, he co-drove a Porsche 908L with Rudi Lins for the Porsche System Engineering factory team, retiring after 317 laps. In 1970, driving a Porsche 917LH for Martini Racing alongside Gérard Larrousse, he finished second overall with 338 laps completed, five laps behind the winning 917KH of Hans Herrmann and Richard Attwood. In 1971, he co-drove the legendary Porsche 917/20 — the so-called "Pink Pig" — at Le Mans with Reinhold Joest, but the car failed to finish.
In 1972, Kauhsen founded his own outfit, Willi Kauhsen Racing Team, to compete in the Interserie and Can-Am series as both owner and driver. Porsche competition director Rico Steinemann arranged for Kauhsen to take over Jo Siffert's 917/10 from the previous Can-Am season and updated it to 1972 specification. The car produced 1000 hp on the dynamometer and approximately 900 hp in race trim from its twin turbocharged engine — among the most powerful racing cars of the era.
Kauhsen won the Imola round of the Interserie in 1972 and collected multiple podium finishes at Zeltweg, Norisring, Keimola, and Hockenheim. His Can-Am appearances were limited to the final two rounds of 1972 at Laguna Seca and Riverside, with a best finish of eighth. In 1973, he again dominated much of the Interserie calendar, winning the first two rounds at the Nürburgring and Imola and finishing in the top six at every subsequent round. His single Can-Am start that year at Mid-Ohio ended in retirement. The 1974 Interserie campaign added another win, this time at Silverstone, and he entered Emerson Fittipaldi as a driver for one round at the Nürburgring.
The Kauhsen team's most celebrated chapter came in 1975, when Kauhsen negotiated a deal with Autodelta to field the Alfa Romeo 33TT12 in the World Championship for Makes. Autodelta had competed somewhat unsuccessfully under its own banner in 1974 against Matra. Under the Kauhsen banner, starting from the second round at Mugello in March, the team ran two cars for driver pairings that included Arturo Merzario, Jacky Ickx, Henri Pescarolo, Derek Bell, Jacques Laffite, and Jochen Mass.
The results were overwhelming. From Mugello onward, Kauhsen's Alfa Romeos won seven consecutive scoring rounds: Mugello (second, but podium positions filled), Dijon, Monza, Spa, the Coppa Florio at Pergusa, the Nürburgring, Zeltweg, and Watkins Glen. The team did not enter the 1975 24 Hours of Le Mans because the race did not count toward the championship due to a conflict between the FIA and ACO. The championship title was secured decisively, and Alfa Romeo's name returned to the top of international sportscar racing for the first time in years.
In 1976, Kauhsen expanded into Formula Two with Renault chassis and an assortment of drivers, achieving limited results. In 1978, the team designed their own Formula One chassis with Cosworth engines in preparation for the 1979 season. The effort culminated in two World Championship Grand Prix entries with Gianfranco Brancatelli, but the car failed to qualify on both occasions, and the team was subsequently closed.