Motor Authority reports that a senior engineer has said that if a hybrid proves to be more economical in the real world than its diesel counterpart, then BMW will build one. Speculation is that such a car would be the next-generation 5-series, and then a hybrid X5 in 2010, both of which would utilize diesel-hybrid powerplants.
What was once a clear-cut hybrid vs. gasoline-powered fight has morphed into hybrid vs. a range of new and traditional alternatives (such as the responsibly driven and maintained economical gasoline engine, as this Autoblog Green piece points out). BMW hasn't been alone in supporting diesels over hybrids, seeing as hybrids are only superior in stop-and-go traffic. As soon as highway driving or sheer driving distance is included, hybrids lose their advantage.
BMW is working with DaimlerChrylser to develop its hybrid drivetrains.