It's definitely not an "M" car, if that moniker does continue it will stand in it's own lineup. More likely BMW is flossing is technology as usual, just like the brief hydrogen models they made. But perhaps this is a prelude to them bringing back the 8 series.
It's a matter of them starting from ground zero. A whole new car for alternative cunsumers.
There's a huge wealthy customer base that do not want hybrids.
They want a full blown luxury car that's a gas guzzling neckbreaking v8, because they can.
To inject that drivetrain into a 5 series for example would be ludicrous. There would be no back seats or the car wood be too long.
As for it competing with the M, never. The M series is a top of the line luxury sports that is meant to be tame at low speeds and a monster at wot. The predictable unpredictability is what makes those kinds of cars. A hybrid with a 3cyl can't give that same amount of thrill.
It's basicly a honda crz, yes they can be fast a fuark but it's still a hybrid.