As the tail stepped out in a lazy drift on a damp German road at close to 100mph, we found ourselves wondering why BMW had chosen to equip its most powerful 3 Series with the same all-season 17" tires as found on the new 328i Sport Wagon. Admittedly, this was a European model and US customers can expect 18" wheels, but the extra power and weight seemed to demand more rubber.

“Its OK, you can specify the Hybrid with any of our four trim levels, including the M Sport line that would get you a staggered tire set up,” a BMW representative reassured us.

This isn’t like the hybrid your mother would drive. With 335hp, 0-60 in 5.2sec and the ability to hit 155mph (possibly 130mph in the US), you’ll piss off Prius owners on a daily basis – especially because you’ll be wearing the perma-grin of a driver with more power and torque than a 335i but the green credentials of a five-star tree-hugger.

With BMW’s ActiveHybrid range (3, 5, 7, X6) now sharing the same powertrain, the price is sufficiently close to 3 Series territory for it to be considered for the company’s mass market offering. And that’s a bonus in the US, where hybrid and diesel sales comprise 5% of the market (10% in CA and OR), and where 10% of new car buyers research alternative fuels when car shopping.

Despite its enormously entertaining performance envelope from what amounts to an F1-style KERS system, the electric motor is more than a power booster. Integrated into the torque converter of the standard eight-speed auto, it’s fed by a 96-cell lithium-ion battery pack mounted low and safely between the rear wheels. In fact, weight distribution is a commendable 49.7/50.3, which helps to explain the sporty handling despite gaining 270 lb of extra equipment. You don’t even sacrifice much trunk space, since the packaging only required the floor to be raised a nominal 2". Perhaps the only concern might be stock 335i brakes, although they seemed to cope well.

Fully electric driving is available for 2.5 miles and up to speeds of 37mph, or 46mph if you use the Eco Pro mode on the Driving Dynamics selector. This is intended to get you the last few miles home or to work.

The AH3 has other tricks up its sleeve like any new F30 3 Series, including brake energy recuperation, auto stop/start, climate control optimization and electro-mechanical steering. Uniquely, it can coast at speeds up to 100mph in Eco Pro mode, whereby the gasoline engine is cut and the electric motor maintains the speed.

What’s more, the power management shifts from electric to gasoline drive seamlessly. You have to watch the display to even know what’s happening underneath you.

One of the more interesting readouts gives you a plot of your consumption history, allowing you to compare journeys and possibly find the most economical way home. However, it pales in comparison to the optional navigation integration that communicates with the power management to allow the car to find the most efficient way to your destination. This could include re-routing you over hills, for example, to allow battery charging on the descent, conserving enough power to allow electric drive as you approach your Home Zone.

The result of all this incredible technology is said to be a 25% fuel reduction compared to a 335i. Obviously you’re paying almost $6500 more for the base AH3, so savings would be long term, unless you can’t continue to exist without the option of zero emissions.

When driven sensibly and away from the rev limiter, it translates to an estimated 25mpg city and 33 highway, which is certainly respectable for a hyper-drive spaceship. Did we mention this thing is rocket-fast?

With its 300hp 3.0L turbo engine and 55hp electric motor, you might expect the ActiveHybrid 3 to deliver even more power than quoted. However, BMW explained that each motor peaks at a different stage to prolong the life of the powertrain, spreading the delivery across a wider range to enhance drivability.

The ActiveHybrid 3 represents a leap forward in technology application and gives an insight to the sort of integration we can expect from the BMW i models when they finally arrive. And the fact it’s a blast to drive confirms we might be able to have our cake and eat it after all.

It’s the best of both worlds, offering a remarkably fast and agile sports sedan with the ability to return hatchback levels of fuel economy, all while enjoying executive comfort and accessories. If this is the future, bring it on!

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