Skyrocketing petrol prices and concerns over the state of the environment have previously driven BMW to focus on hydrogen power. However that focus is not so narrow as to exclude petrol-electric hybrids, or even all-electric vehicles. In fact, BMW is currently weighing its options for introducing an electric vehicle for the U.S. market in response to the new CAFE regulations.

The German maker had not previously concerned itself with the regulations as much as will have to in the future: by 2012 BMW will be classed as a 'large vehicle manufacturer' and will therefore be required to offer at least one model that emits no carbon dioxide. BMW's Norbert Reithofer spoke with Auto Motor und Sport about the upcoming vehicle, hinting it could initially be an all-electric urban mini-car, "but we have asked ourselves if we should develop the basic concept for something other than an electric car." This last tidbit brings us full circle to BMW's investment in hydrogen power. But now we have an avenue between the present and the hydrogen-powered future that wasn't previously illuminated.

Because the infrastructure for a hydrogen-based transport system is still quite a long way off, a sort of cross-over platform, in the shape of a legally requisite all-electric vehicle could provide the bridge between petrol-electric hybrids and fuel-cell vehicles. In the process, BMW will have to decide whether it will manufacture the car alone or with a partner - perhaps some similarly positioned large vehicle manufacturer, reports the Turkish Press.

The news of the unsuccessful termination of long-standing and rather cloaked talks with Mercedes just this week likely signal that Daimler will not be working with BMW on the project. BMW boss Reithofer nevertheless remains hopeful for some kind of partner, saying "Our goal is a cooperation but if it does not work out, we will do it alone. We will make a decision this year."

Reports of BMW's work on an all-electric car have been surfacing quite often recently, as has talk of a new mini-car brand. Taken with this new information, it seems likely both will be coming, with the new all-electric being the pilot vehicle for the new brand, aimed at big cities. Audi is also in the process of building a production version of the A1 Metroproject originally shown in Tokyo last year, and BMW's rumored minicar has been tipped as a primary competitor.

Preview: 2010 Audi A1 five-door and cabrio

Audi A1 Metroproject