Mate Rimac raced his 1986 BMW 3-series in Croatia until the engine blew during a rough day at the track. Most drivers would've thrown in a new engine or cannibalized the car for parts, but not Rimac.

No, he took his machine in an entirely new direction, and BMW might do well to have a look at what he's done because it is the future of high-performance motoring.

"I pulled the engine out of the car, looked at the empty space under the bonnet and wondered what to put in there," Rimac said. "And then it hit me. I'll make an electric racecar."

What started as a lark became a two-year project for Rimac, whose company VST Conversions has brought the BMW through four generations of ever-improving electrification.

"The first stage, with off-the-shelf components, was finished after six months but it was quite simple with poor performance," he said. "Further on, we started developing and producing our own components and gradually replaced the already installed store-bought [ones]."

The current iteration features 300 lithium iron phosphate cells in a battery pack that provides a claimed range of with 110 miles – roughly a full day of drag racing, drifting or general hooning.

Propulsion comes from a DC motor designed and built by VST; it churns out a whopping 900 horsepower. That's good for a Tesla-beating 0-60 time of 3.3 seconds. Keep the pedal mashed to the floor and you'll see a top speed of 174 mph. That's on par with some of the best high-performance sports cars on the road today, and it makes this home-built EV a worthy competitor to high-end electrics like the Audi eTron.

But wait, there's more.

"These days we're about to install our newest development – a very small, light and efficient liquid-cooled AC motor with permanent magnets," Rimac said.

The upgrade is part of his plan to keep improving the car.

"This BMW, our test mule, won't ever be 'finished.' There is always room for improvement and we are continuously working towards making it lighter, faster and simply better," he said.

Though he does enjoy drifting the BMW, Rimac isn't just working on the car for his own benefit. It's merely a precursor to a 1,088-horsepower electric supercar he hopes to have in production by 2012. It will feature a proprietary liquid-cooled AC motors at each wheel, each capable of a rapid response that will vastly outperform the torque vectoring possible from a drivetrain mated to an internal combustion engine.

"So imagine if you will, a car with over 1,000 horsepower that can control each wheel separately 1,000 times per second in a corner," Rimac said. "We're not only imagining it, we're actually building it."

*Photos, video: *VST Conversions