The company is undertaking trial of 100 prototypes and targets to start commercial production of the car by the year 2020.
Called 'BMW Hydrogen 7', the bi-fuel car run on liquid hydrogen and petrol, BMW group Chairman Norbert Reithofer told journalists from India in Munich.
The car, when fully developed is expected to ease off the demand pressure on traditional fuels used in vehicles. "For the long-term, we consider hydrogen in the combustion engine the most sustainable solution," he said.
However, storing hydrogen is still a problem and it was still a challenge on how to develop filling stations for hydrogen fuel, he said.
As a first step BMW has developed hydrogen-powered bi-fuel car, demonstrating that driving without fossil fuels and emissions can be done, Reithofer said.
"BMW Hydrogen 7 can attain maximum speed of 230 kilometres per hour and can attain from zero to 100 km per hour speed in 9.5 seconds," a BMW official said.But starting manufacturing such a vehicle with commercial success was still a long way as efficient infrastructure and regenerative production of hydrogen were yet to be developed, Reithofer said.