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The E60 M5 was introduced in 2005. It has a 4,999 cc (305.1 cu in) BMW V10 S85 engine redlining at 8250 rpm, and developing a peak output of 500 bhp (373 kW; 507 PS) and 520 N·m (380 lb·ft) of torque. Unlike some other BMW engines which utilise Valvetronic to infinitely vary valve lift to eliminate the throttle plate, this engine has individual throttle bodies per cylinder.
Other key features include a stiffened aluminium chassis and a 7-speed SMG III semi-automatic transmission. Front fog lights are unavailable for the E60 M5, as the amount of air required by the engine forces the spaces under the bumper, normally occupied by fog lights in other E60 cars, to be reallocated for air intakes.
The BMW M5, along with the new BMW M6, were designed to use the new SMG III electrohydraulic manual transmission. The transmission, while responsive at the track, has been criticized for its general lack of smoothness in everyday driving. In October 2006, BMW announced that a 6-speed manual transmission would be available in North America, based on suggestions from the motoring press. The 6-speed manual M5 was marginally slower, since the stability control cannot be disengaged as per the SMG version. The SMG III includes the "Launch Control" feature, which allows maximum performance standing starts automatically. However, the US spec vehicles have a reduced rpm to prevent vehicle damage and abuse.