I cant help but believe, had BMW wanted, they could have produced a more efficient V8 for the upcoming M3/M4. One needs to look no further the Fords Coyote engine for an example. 18 mpg city, 25 hwy.
Is Coyote mpg helped out by the funky 6th gear? Most certainly, but Ford was able to beat the gas guzzler tax and build a heck of an engine.
I admit, I know nothing about designing automobile engines, but I've always been educable. I know many posters understanding of such things outstrips my own... so learn me up.
Remember those V8 tomato juice commercials? We coulda had a V8!