i am commenting from only a personal view of where the automotive industry will head in the next few years, so take it with a pinch of salt.
I think the next M car will showcase the next level of efficiency improvment by BMW.
they are spending a lot of money on R+D into energy storage type drive trains, so expect the results of this to be implemented into their flagship model.
I think a SMALLER, more efficient engine (probably turbocharged), will be combined with an electric motor which will provide the additional power when needed.
turbo lag will be taken care of by instant response from the electric motor, quite possibly boosted by super capacitors.
the car will need approx 600HP, and i think up to half of this will be provided by the electric motor. the sustained maximum output will never need to be above what is needed to cruise at the maximum speed of the car which is 155MPH, say arround 300HP.
dont be surprised as well to see all wheel drive.