Like many new BMW models, the new BMW X3 features an 8-speed automatic transmission which brings smooth shifting, sportiness and efficiency to new levels of perfection. Compared to the exemplary 6-speed automatic offered previously, the 8-speed has "taller" cruising gears that make a significant contribution to reduced fuel consumption and emissions, as well as quietness. Its wider spread of ratios from lowest to highest gear enhances acceleration and response across the range of driving speeds. The revolutionary design even allows for direct shifts from 8th gear to 2nd gear for maximum acceleration.

This new automatic's attributes have been achieved via an innovative concept that provides the two additional ratios (7 and 8) with no increase in bulk or weight. In a ground-breaking arrangement, four planetary gearsets and five clutch packs are controlled in a way that no more than two of the five clutch packs are freewheeling at any given time. The modest increase in the number of mechanical elements allows the new transmission to achieve unusually high efficiency. The so-called "gearing efficiency" is higher than 98% in all eight gears. . In 6th, gearing efficiency is at its optimum because that is a direct drive. Combine this with reduced friction and the ability to keep the torque converter "locked up" more of the total driving time, and the transmission becomes very much a part of the overall BMW EfficientDynamics concept.