BMW has more plans than just making clean and green cars. They are also working on Project i which is a code name for a tiny electric car that will launch in 2012, according to Car and Driver.
The car will be smaller than the Mini Cooper but for now, the production is tentatively named "City" like Honda City? Essentially, the City will be a three-door hatchback that's specifically designed to meet California's ZEV (zero-emissions vehicle) requirements, which kick in beginning in--you guessed it--2012.
(The City also appears to be a completely separate project from the electric Mini E.)
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