The N1 engine is based on the N47D20 twin-turbo diesel engine from the 123d with 204PS (150kW) and 400Nm, which was not offered by BMW in the E90 3-series. It is the first large-scale production diesel engine to exceed engine output of 100hp/liter. In 2007, 2010 and 2011, this BMW engine was winner in the prestigious International Engine of the Year awards.

This engine was introduced in the E9x D3 BiTurbo in late 2008.

The engine block and internal parts were not modified by Alpina. Modifications include larger Garrett turbochargers, larger injectors, intercooler and intake sourced from the 330d, as well as reprogrammed engine management.

Update focused on improved fuel consumption and emissions. It is introduced in early 2009.