Team New Zealand have overcome an early rudder issue to impress America's Cup observers with a slick second training display in Bermuda.

The Kiwis launched their AC50 for the first time in the tropical waters of the Great Sound on Sunday but appeared to lose the port side rudder on their return from that short test sail, according to local reports.

"Crew members had been in the back of each hull working on something down inside where the rudders are installed," the Royal Gazette reported of the Kiwis docking back at their base.

"A diver went in the water, apparently to find the missing port side rudder in the slip under where the boat had been, but the rope he took down to haul it up to the chase boat came up empty on the first try."

READ MORE:

* Spithill has swim

* Team NZ coy over Bermuda trials

* Burling: 'Bring it on'

* Are Oracle copying Team NZ pedal power?

* Barker: Team NZ look strong

The rudder was eventually found in the 10m deep basin and the Kiwi boat looked slick on its second run on Monday (NZ time).

Team New Zealand went through their full routines in 10-15 knot winds under the keen observance from spy boats, eager to see the working's of the radical pedal system and trying to get a handle on their speed and crew work.

Videos published show the Kiwis on the top of their game and arguably ahead of their rivals in terms of manoeuvres.

There have been regular videos of all the teams training in Bermuda and the latest focus on Team New Zealand showed them pretty much faultless as they went through foiling tacks and gybes.

There was the occasional "kiss" of the surface but nothing like the "splashdowns" that have characterised the early training efforts of the five other syndicates in their new boats.

The challenge in this America's Cup is to try to get around the short courses totally foiling. Every touch down costs time and distance.

The challenger qualifying series starts on May 27 (NZ time).