The hybrid race has gotten more competitive. I've long wanted to see cheaper ones, and Toyota has finally answered my prayers with a 53-mpg PriusC for less than $19,000. That will be a tough act to beat. But the field is wide, and there's a case to be made for something completely different — hybrids with both muscle and mileage.


BMW, which has long claimed that diesel was the answer to the world’s environmental problems, has finally bowed to the inevitable and is starting to electrify. It debuted an all-new sixth-generation 3-Series, and added an ActiveHybrid 3 to complement the ActiveHybrid 5, both of which are on display at the 2012 North American International Auto Show in Detroit.


From BMW’s perspective, hybrids are an opportunity to give buyers a diesel level of fuel economy without sacrificing performance. The ActiveHybrid 3, for instance, offers the acceleration of the 335i with the mpg of the 328i.


This marks a welcome departure from BMW’s questionable strategy with the X6 hybrid SUV (at right). That car, powered by a 400-horsepower twin-turbo V-8, was all about “ultimate driving machine” performance, without much fuel-economy boost. They said it was a “BMW first, and a hybrid second.” And it didn’t work — less than 1,000 of those vehicles have reportedly been sold, and it's out of the produce lineup for 2012.


Dr. Herbert Negele, who heads the 3-Series launch program, told me in Detroit that planning for a hybrid version began earlier. “When we first began working on the car in 2007 or 2008, we already knew there would be a hybrid version,” he said. “We didn’t yet know then how popular hybrids would become, because they offer performance without sacrificing functionality.” Germans still love diesels, but they couldn't miss that the world — and especially the U.S. — has embraced hybrids.


Still, Negele describes hybrids as “an interim technology” on the way to full electrification, and he's no great fan of plug-in hybrids. “There are two drivetrains,” he said, “which creates a weight problem, uses up a lot of space and costs a lot of money.” BMW's Dave Buchko told me, "We take a broad range of approaches. The internal-combustion engine will be around for a while, but hybrid technology can't be ignored, and we see a place for electric vehicles as well."


The 3-Series ActiveHybrid is no performance lightweight, offering 355 horsepower and a zero to 60 time of about 5.6 seconds —maybe a fraction of a second better than a comparable 335i. There’s no final U.S. fuel economy figure, but it could be a combined figure of 37 mpg. “It’s V-8 performance with four-cylinder economy,” Negele said.


The ActiveHybrid 5, at left (based on the 535i), beefs up the twin-turbo, 306-horsepower, three-liter gas engine with a 55-horsepower electric drive system (the motor is integrated into the eight-speed transmission) and a 1.35-kilowatt-hour lithium-ion battery pack (identical to the pack in the 3-Series). BMW makes its own packs, and A123 supplies the cells. In total, 340 horsepower is on tap, and because it's heavier than the 3-Series an estimated 28 mpg overall. The 3-Series hybrid is similar under the hood.


The hybrids can travel about 2.5 miles in all-electric mode, and at 37 mph the gas engine kicks in. Auto-stop is on board both cars, with the added feature of zero-emission coasting on the overrun. Accessories like air-conditioning run off the lithium-ion battery when the engine is disengaged. Zero to 62 mph in the 5-Series is 5.9 seconds, so the performance of the two BMW hybrids is likely to be comparable.


These being BMWs, they incorporate advanced thinking — in this case, the ActiveHybrid 5’s drivetrain management system that includes analysis of the route topography. If the car senses a hill ahead, it will use the li-ion battery to supplement climbing power, knowing that the regen braking can recharge the pack on the way down.


A big issue here is price. One reason the X6 stayed on dealer lots was its astronomical $89,725 cost. The ActiveHybrid 5 isn’t cheap, either, at $61,845, which is $8,700 more than a 535i. The price for the 3-Series wasn’t announced, but Negele says it will be “more than a 335i and cheaper than an M3.”


Since 3-Series cars run from $35,000 to $43,000, maybe the hybrid comes in at $50,000? Still a lot of scratch, twice the price of a Prius (which gets better mileage). The high cost of entry could mean the car won't sell in large numbers, which is a shame. The company had the same experience with the exquisite 507 50 years ago. BMW has been in a cost-cutting mood lately, but it may want to think about losing money on these cars, at least initially. That’s how the Prius managed to snare more than 50 percent of the U.S. hybrid market.


Negele said that the U.S. is indeed the primary market for the hybrids, but Japan is likely to be a surprising number two (German high-performance cars are popular there), and Germany third. Carbon-reduction tax incentives are likely to play a role in selling some of these cars.


Jason Forcier, a vice president of the Automotive Solutions Group at A123, said in an interview that automakers like BMW (and GM with the Volt) make their own packs because “they want to fully understand the performance of the whole system. But the majority of our business is full systems.” The BMW packs have 110 A123 cells each.


Forcier said BMW’s choice of A123 is “strong validation” of the company’s nanophosphate li-ion battery chemistry. A123 is, indeed, gaining a commanding position in the electric vehicle space. It currently supplies BMW, Daimler, GM, Fisker, Navistar, Smith Electric trucks, SAIC in China, the British McLaren supercar and, since last week, Via Motors, which announced a trio of converted GM-sourced extended-range plug-in hybrids at the Detroit show. A version of the Silverado pickup, with available 110- and 220-volt external power outlets (expected to be a big selling feature) will be offered to fleets this year, and to the public next year. A Suburban and Express van are next.


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Jim Motavalli ( @jmotavalli ) writes about cars, technology and the environmental world to anyone curious enough to ask.

Detroit Auto Show: BMW's hybrids combine muscle and mileage
BMW is fielding an all-new 3-Series, and with it an ActiveHybrid 3 that offers both zero to 60 in 5.6 seconds and about 37 mpg. Up a notch, there's the ActiveHy