CODE-NAMED INTERNALLY as Project i, BMW is planning to launch a family of ultra-efficient electric vehicles by 2012.
Despite recent talks that BMW and Fiat would form a joint project to develop a range of electric vehicles, the German manufacturer is understood to be working on an all-electric three-door hatch of its own.
Dubbed 'City', the new car will be smaller than the 1 Series and more affordable than the Mini Cooper.
This week, BMW has announced that it has reached an agreement with Bosch and Samsung JV to develop and supply batteries for its Project i range of hybrid and all-electric vehicles.
The two suppliers have formed a joint venture called SB LiMotive, which recently acquired Cobasys, the same battery supplier GM will use to provide power for the upcoming Volt.
"The decision is a major milestone along the way to serial production of the Megacity Vehicle. The battery is a key component in any electric vehicle - it determines the range and performance of the car," BMW CEO Norbert Reithofer said in a statement today.
"With SB LiMotive we have selected a supplier who offers the best available technology, combining leading German automotive expertise with future-oriented Korean battery know-how."
A handful of details regarding Project i were revealed during the BMW Annual Accounts Press Conference in March, noting that the City - also referred to as the Megacity - would be a part of BMW's "Project i" range of near-zero emission city cars.
The City car would be the second car developed by BMW's ?Project i? program, the MINI E being the first.
BMW is expected to announce by the end of the year whether the City/Megacity range will feature among the existing BMW lineup, or whether the company will launch a new subsidiary to sit under the company umbrella with Rolls Royce and MINI.
BMW Chairman and CEO Norbert Reithofer told Car & Driver the City is being designed with the international market in mind, with California's Zero-Emission-Vehicle requirement uppermost.
Mr Reithofer said that the City car would be recognisably 'BMW' in its design, with short overhangs, a wide track and a low roofline.
Customers will have the choice between a fully electric powertrain - featuring a water-cooled lithium ion battery with a 160km range - or an ultra-high-efficiency combustion engine. However, BMW has aspirations for the Megacity that stretch beyond mere fuel efficiency.
"With the Megacity Vehicle, we are also pursuing a radical approach toward establishing a truly sustainable value chain, from development to production and sales," Reithofer said at the BMW Annual Accounts Press Conference.