The team, who officially launch their new AC50 boat on Thursday ahead of the regatta that starts in May, were photographed on Tuesday with their grinders seated and powering the hydraulics needed to control the wingsail with their legs.
Local television then showed the super-fast foiling yacht on Waitemata Harbour in Auckland on Wednesday with four members of the six-man team pedalling, rather than using their arms to power the winches that provide the hydraulic pressure.
TVNZ reported that Van Velthooven, who won bronze in the kierin at the London Games but missed selection for last year's Rio Olympics, had been involved in helping with the design of the system.
A Cycling New Zealand spokesman also told local media that Van Velthooven had been granted a leave of absence from their sport's high performance programme but was unsure as to what he was doing.
Former Team New Zealand skipper Dean Barker, who is leading Japan's challenge for the America's Cup, however, was not overly impressed with the innovation, having also considered switching to pedal power but ruled it out.
"We evaluated it and didn't think it would pay for itself," Barker told Radio Sport. "There's a real balance... the theory is 100 percent correct. Cycling will produce a hell of a lot more power.
"But the dynamics of these boats, changing sides frequently, different manoeuvres, there is a cost to go down that path.
"Good on them for giving a different concept a go. All the teams have evaluated -- we have, Oracle also -- and the decision we took is that it isn't going to pay for itself."
The regatta for the challenging syndicates -- from Britain, Sweden, Japan, France and New Zealand -- starts in Bermuda on May 26 with the America's Cup beginning on June 17 between the winner of the qualifying regatta and holders Oracle Team USA.
(Reporting by Greg Stutchbury; Editing by John O'Brien)
