The pair had been collaborating on hybrid systems for some years now but by all accounts the deal is off as BMW chases "a better offer elsewhere".
And although BMW may be looking for an exit, it has been suggested Daimler wants to keep the partnership alive. So far several vehicles have benefited from the partnership including the S400 Hybrid and ML450 Hybrid.
The report also indicates that BMW may be put off by Daimler’s new-found commitment to pure electric vehicles, and although BMW has its fair share of EVs planned, Daimler is reportedly keen on bypassing hybrid vehicles to move directly to electric power - a move that would leave BMW with the bulk of the hybrid development responsibilities and costs.
There's no word yet on who BMW's new hybrid partner may be, but rest assured, we'll keep you posted.