It's been rumored for several months now that BMW is planning a revival of its famed Isetta nameplate, and it looks as though the German automaker will give the green light to the next-generation city car. The all-new Isetta will be a rear-motored electric car and should hit the U.S. market by 2012.

The Isetta project is intended to help BMW meet California's upcoming zero emissions vehicle (ZEV) legislation. The all-electric mini car will launch in the U.S. in 2012, but will likely be sold in other world markets after that date.

The new Isetta will also spawn a new range of city cars. The new range will be powered both diesel and gasoline powerplants, and future models could even be motivated by BMW motorcycle engines.

BMW has to decide which brand it will market the new car under and is still considering a partnership with another automaker. "It could be BMW, Mini or another name," BMW chief Norbert Reithofer told AutoCar. He continued by saying "co-operation [with another car maker] is possible," stating that BMW would decide on the matter by the end of 2008.

One likely candidate is Mercedes-Benz' Smart division.

It's also possible that BMW will base the new Isetta on a concept by Magna Steyr, the firm that currently produces the BMW X3.