According to BMW, there has been a skunkworks program in Palo Alto for ten years.

When a small handful of engineers moved into an office building in Palo Alto, California, in 1998, no one knew exactly what their tasks would be.

Their brief was broad: to be creative, to work independently, and to be open to all kinds of influences beyond the realm of automotive engineering. They were to seek inspiration in the highly innovative environment of Silicon Valley and to find answers to questions that no one in Germany had even started asking yet. Currently, their efforts are focused on technology for the U.S. market.

Stephan Durach, heads the BMW Group Technology Office in Palo Alto. Originally from Munich, Durach previously worked at the Groups Innovation and Research Center (FIZ.

Here is Durach, talking about the technology in the new 2009 BMW 750.