V. Maturity and Mastery: The E38 Generation (1994–2001)
When the E38 750iL debuted in 1994, it heralded a new level of technical sophistication for BMW’s flagships. The car’s outward appearance was elegantly understated—a low-slung, well-proportioned sedan—but under the skin, BMW’s refinement shone. The chassis featured a revised multilink rear suspension and updated front suspension tuning, delivering both a smoother ride and more agile handling than the outgoing E32. In the 750iL V12 model, self-leveling rear suspension was standard equipment to maintain optimal ride height and composure under heavy loads (crucial for a long-wheelbase luxury sedan often laden with passengers). The E38 also offered an Electronic Damper Control (EDC) system, adjusting shock absorber firmness in real time to balance comfort and handling; a precursor of active suspension, this was fitted as standard or option on the V12 models to ensure the big sedan could corner with confidence yet cruise serenely. Complementing this, BMW’s Servotronic power steering provided speed-sensitive assist—feather-light for parking maneuvers, yet firm and communicative at highway speeds—enhancing the sense of maneuverability for such a substantial car.
Inside, the 1994 750iL introduced new heights of luxury and technology. The E38 was the first BMW to offer a built-in satellite navigation system, available by the mid-1990s. Though primitive by modern standards—a small 4:3 aspect ratio display in the dash (see above)—this option signaled BMW’s intent to lead in automotive tech. The car also offered side-impact airbags and an improved traction/stability system. Early E38s came with ASC+T (Automatic Stability Control + Traction), and by 1997 a more advanced DSC (Dynamic Stability Control) was introduced, using sensors to correct skids.
Despite its high-tech arsenal, the core appeal of the 750iL remained the V12 driving experience. Period reviews noted that the new 5.4L V12 delivered effortless thrust with exceptional civility. In a 1995 comparison of V12 luxury sedans, Car and Driver found the BMW 750iL was the quickest in acceleration, dispatching 0–60 mph and the quarter-mile faster than the Mercedes-Benz and Jaguar entrants. The 750iL’s 326-hp engine, in concert with a responsive 5-speed automatic, propelled the car with “a rush” belying its 2-ton weight—yet did so with uncanny quiet and smoothness. Reviewers praised how the BMW could transition from 100 mph cruising to full-throttle passing with barely a ripple felt by the occupants. This duality of performance and poise led many to regard the E38 750iL as the driver’s choice among high-end sedans of its day. Indeed, even with softer suspension tuning than its V8 siblings, the long-wheelbase 750iL maintained BMW’s hallmark dynamic feel: the steering was precise, the body control superb, and the car had a balanced, confidence-inspiring demeanor on winding roads—characteristics not typically associated with ultra-luxury saloons of the era.
Luxury buyers also noticed the incremental improvements in NVH (noise, vibration, and harshness) and comfort. The E38’s cabin was even quieter than the E32’s, especially when fitted with the available dual-pane insulated glass on the 750iL. This feature (two layers of glass with a thin air gap) helped hush wind and traffic noise, creating a bank-vault ambiance at speed, although Mercedes did beat the 7 Series to market with this feature. Extensive use of sound-deadening materials and hydraulic engine mounts ensured that the V12’s presence was nearly imperceptible—save for the swell of refined power when pressed. The 1994 750iL may not have broken new ground, but it did raise the bar.
By the final model year 2001, the E38 750iL had further evolved in subtle but significant ways. Continuous refinement over the production run meant that a 2001 model was an even more polished machine than the 1994 debut edition. The M73TUB54 engine brought emissions controls up to date without sacrificing performance. Drivers in the field would not notice a power difference.
BMW gave the E38 a mild facelift in 1998 and continued to add updates through 2001. The LCI (life cycle impulse, i.e., facelift) included clearer headlight lenses and Celis LED tail-light elements, but the changes were intentionally subtle and evolutionary. More impactful were the interior and equipment upgrades. By 2001, the 750iL came standard with every luxury feature in BMW’s arsenal: from the soft-close trunk lid to rain-sensing wipers and new wide-screen GPS navigation.
Recognizing the model’s sporting merits alongside its luxury bona fides, BMW offered a Sport package for the 750iL toward the end of production. This 2000–2001 750iL Sport included subtle chassis tweaks: firmer EDC calibration, reduced ride height, high-performance tires on 18-inch M-Parallel alloy wheels, and a quicker steering ratio—all without compromising the self-leveling rear suspension’s supple ride quality. Exterior “Shadowline” trim (black instead of chrome window surrounds) and interior touches (three-spoke sport steering wheel, shared with the E39 M5) completed the package, signaling that this big V12 could still dance. The 750iL Sport epitomized the E38’s ability to bridge old-world luxury with driving engagement. A contemporary road test of a 2001 750iL Sport noted that the car “cruises along at 100+ mph as if you were going 45” and yet could tackle corners with surprising agility. This dual nature—docile limousine on one hand, confident sports sedan on the other—was a suitable capstone to the E38 V12’s lifespan.
Variants and Competition
Within the E38 V12 program, BMW also pursued special configurations that reflected a design philosophy of integration and adaptability. The standard 750iL itself was a long-wheelbase “Limousine” (with a wheelbase ~140 mm longer than the 750i short-wheelbase offered in some markets), providing expansive rear legroom expected in this class. Beyond this, BMW built even more specialized variants: the 750iL Protection and 750iL High Security models. These were factory-engineered armored versions of the E38, designed to provide ballistic protection for high-risk clientele such as heads of state. The Protection line offered discreet armoring (reinforced steel and aramid fiber in body panels, bullet-resistant glass, run-flat tires) to roughly B4 specification, guarding against handguns and light explosives. The High Security version went further—up to B6/B7 levels—capable of withstanding high-caliber firearms and grenade blasts. Importantly, BMW integrated these features without fundamentally altering the car’s appearance or performance. The V12’s ample torque was vital here, as the armoring added significant weight. Self-leveling suspension was retuned to cope with the load, and larger brakes were fitted, but otherwise the experience remained that of a 7 Series: supremely smooth, quiet, and composed. These armored 750iL models found use in official government fleets and elite private clientele worldwide, underscoring the V12’s reputation for reliability and power under all conditions. In BMW’s own marketing, they emphasized that even in Protection trim, the 750iL lost none of its dynamic character—a point of pride for their engineering teams.
Another notable variant was the ultra-rare BMW L7, an extended-wheelbase 750iL. Built in limited numbers for smaller markets in the Middle East and Asia, the L7 added about 25 cm to the standard iL wheelbase, transforming the 7 Series into a true limousine with conference-level rear seating. Every L7 produced was powered by the V12, as its target clientele demanded the smoothest engine for such an exclusive conveyance. Features like a partition window, rear entertainment, and even folding writing tables were offered, elevating the 7 Series into Rolls-Royce territory. Although the L7 was niche, it demonstrated BMW’s confidence in the E38 platform and V12 engine to compete directly in the limousine class.
Consumer perception of the E38 750iL was overwhelmingly positive in its early years. Reviews and owner testimonials praised the car’s discreet styling and lack of ostentation—in contrast to the bulky, chrome-laden appearance of the rival W140 S-Class, the BMW exuded a kind of confident understatement that appealed to many executives and dignitaries. Compared to other manufacturers’ flagships, the 750iL was seen as the drivers’ choice, whereas an S600 was often chauffeur-driven. BMW’s decision to emphasize driving dynamics paid off in press accolades: even as it coddled passengers, the V12 7 Series was routinely described as “surprisingly agile” and enjoyable behind the wheel, a trait that reinforced BMW’s sporty brand image in a class of otherwise ponderous sedans. The car’s performance metrics—0–60 mph in the low-6-second range, electronically limited 155 mph top speed—were on par with some sports cars of the day, which made for great advertising fodder. By 2001, the 750iL had one of the highest owner loyalty rates in BMW’s lineup—many V12 owners replaced their cars only with the next V12 7 Series, or in some cases held onto them as future classics.
BMW nevertheless faced formidable competition in this era. Its most direct rival was the Mercedes-Benz S600 (W140), launched in 1991 as the 600SEL. Facelifted and renamed the S600 in 1994, coinciding with the E38’s release, it catered to the elite, perhaps cross-shopped with the likes of Rolls and Bentley more than BMW. In comparison tests, the W140 was praised for its serene ride and isolation, but it was often criticized for its excessive bulk, less engaging drive, and stratospheric price (at $135,000, more than 50% higher than the 750iL and over 70% higher than the XJ12). A 1995 Rolls-Royce Silver Spur was practically within spitting distance by comparison—at $165,000, it had only a 22% premium above the big Benz.
The BMW 750iL, nearly 500 lb lighter, was more nimble and responsive, with one test noting it “shrank around the driver” in a way the big Mercedes did not. While the W140 had marginally quicker straight-line performance thanks to its extra power, the 750iL was not far behind. In terms of luxury amenities, the two traded blows: the Mercedes introduced double-pane window glazing and soft-close doors first, but BMW quickly offered similar features (the E38 had soft-close trunk and later door options, and its insulated glass achieved the same effect as M-B’s). By the late ’90s, many reviewers concluded that the choice came down to philosophy: “the S-Class pampers you, the 7 Series involves you.” For BMW, being mentioned in the same breath as the venerable S-Class was itself a victory—and indeed the 750iL’s sales, while lower than the V8 7 Series, were healthy relative to S600’s very limited volume. The 7 Seires of two generations prior was an also-ran by comparison—a sporty larger sedan but nowhere near the benchmark W126 S-Class of the 1980s.
Another contemporary was the old guard, the Jaguar XJ12. Jaguar curiously offered the ancient XJ12 Series III until 1993, briefly introduced the 1980s-square XJ40 body XJ12 in 1994 only, and marketed the new X300-based XJ12 in 1995 and 1996. The Jaguar was smaller and lighter than the German V12 barges and had a distinctly old-world character: by 1996 its 318 hp engine was smooth and sonorous, but the car itself lacked the sophisticated electronics and solid feel of the BMW and Mercedes. In a 1995 comparison, Car and Driver found the XJ12 to be the slowest of the trio and noted that its acceleration was more leisurely than the others. It wafted to a higher top speed only because it lacked an electronic limiter, but in most measures of modern luxury—space, safety, technology—the Jaguar was behind. Jaguar’s V12 sedans were plagued by perceptions of iffy reliability in stark contrast to the bulletproof reputations of the Germans. Jaguar would discontinue its V12 after 1997, switching to a supercharged V8 for performance. This left BMW and Mercedes the last V12 sedan makers of the mid-to-late ’90s (until Rolls borrowed one from BMW for its own effort). BMW’s market positioning benefited from this culling of the field: the 750iL came to be seen as part of an exclusive two-horse race for the “best car in the world.”
The Lexus LS400, though powered by a V8, had from 1989 onward demonstrated a new approach to luxury: impeccable build quality, utter mechanical refinement, and a lower price point that undercut the Europeans by tens of thousands, all the while suggesting industrial espionage and aping a first draft W140 Mercedes. By the time the E38 was launched, Lexus had proven that a well-engineered 4.0 L V8 could match or even surpass a traditional V12 in smoothness and silence. Car and Driver later remarked that in the early ’90s “these cars (750iL, S-Class, etc.) were being shown up in refinement and tech by vastly less expensive vehicles… [like] the Lexus LS400.” This was a humbling observation for BMW and its peers. While the LS400 never offered the prestige of a V12 or the European badge cachet, its presence forced cars like the 750iL to be better. By the late ’90s, the 750iL was a much costlier car than an LS400 (nearly double the price) and some buyers did cross-shop the two. A few comparison tests pitted the Lexus against the 740i/750iL. The consensus was that the Lexus was as quiet and comfortable as the BMW—a remarkable feat—but lacked the performance edge and emotional appeal of driving the Bavarian V12. In markets like North America, Lexus succeeded in luring away some traditional Mercedes/BMW clientele, but the 750iL and S600 remained the choice for a specific top-tier customer who valued the intangible pedigree of the V12.
At the fringe of the 750iL’s competitive set were ultra-luxury marques Rolls-Royce and Bentley, which in the early 1990s were still producing very costly, hand-built sedans (the Silver Spur and Bentley Turbo R) using old-school 6.75 liter V8 engines. These cars, nearly twice as expensive as a 750iL but starting at around a 25% premium over the S600, offered a different kind of appeal—one of bespoke craftsmanship and tradition. But they objectively they lagged far behind in technology, performance, and features. A 1994 Bentley Turbo R, for instance, despite a turbo V8 making 300+ hp, could not match the acceleration or handling of a 750iL, and its 1970s-era chassis and features were antiquated next to the BMW’s modern electronics. Industry observers noted that BMW’s 7 Series (and Mercedes’ S-Class) had effectively moved into the space that Rolls-Royce once occupied at the pinnacle of luxury engineering.
The E38 750iL thus embodied the 1990s’ transition in luxury: the point at which modern electronics and globalization met old-world luxury values. It was the last BMW 7 Series to present a traditionally elegant face—its successors would adopt more radical designs and even higher technology (iDrive, active suspension, etc.)—and the E38 is often remembered with a sense of nostalgia. Enthusiasts and historians see it as the climax of the “classic” era of BMW: a car that won over CEOs and car buffs alike, featured in Hollywood films (a high-tech E38 750iL starred in the James Bond film Tomorrow Never Dies, underscoring its image as the ultimate gadget-filled vehicle of the time), and cemented BMW’s credibility at the top of the luxury market. In retrospective reviews, the E38 is frequently lauded for its timeless design, superb build quality, and the vault-smooth V12.
Production of the E38 wound down in early 2001 to make way for the radical E65 7 Series. In total, between the E32 and E38 generations, BMW built 73,776 750i/750iL sedans—a relatively small volume compared to lower models, but significant quantities for a flagship luxury car, no less one with a V12. BMW’s V12 had solidified its role as a prestige engine, conferring exclusivity and top-tier status on the 7 Series and by extension, BMW’s entire luxury lineup. Buyer perception of the 750iL remained that of the ultimate BMW: it was the cost-no-object choice, typically purchased by heads of state, industrial magnates, and those for whom the $90,000 price (in 1995 US dollars; roughly $175,000 in 2025) was justified by the desire for the best.
In the E38, BMW showed its move into the top of the luxury arena with the E32 750iL was no fluke. The 7 series had fully come of age at the highest level of luxury sedans. What began in 1987 as a bold challenge to the automotive establishment matured by 1994 into a deeply refined product that in many ways led that establishment. BMW’s V12 in the E38 was not about flashy numbers or exotic materials for their own sake—it was about subtle engineering excellence, the kind that is felt more than seen or heard. The E38 750iL delivered on the promise that a twelve-cylinder BMW would be the “finest engine built” for the “ultimate driving machine.” Many enthusiasts and historians today consider the 1995–2001 E38 generation as a high-water mark in BMW’s luxury lineage—a car that combined the maturity of refined engineering with the “mastery” of driving dynamics in a way few flagships before or since have achieved. It is likewise considered by many the finest looking 4-door BMW ever designed. In this way, it not only delighted buyers and reviewers of its era, but also paved the way for BMW’s expanded influence in the luxury arena, from supplying engines to Rolls-Royce and Bentley to eventually taking the helm of Rolls-Royce Motor Cars.