This entire episode is amazing. How did they think they wouldn't get caught?!
They're a big business. The trick is hidden in software and controls emissions which require special equipment to detect. Of course they didn't expect to get caught, and if they did get caught they didn't expect to get punished. After all, if Lenovo can keep shipping malware in their laptops, why can't VW ship "malware" in their engine management?
Expanding on that a little - it's not entirely accurate. BMW are shifting to electric powertrains, but not entirely electric; they're building hybrids too. Since they've not yet said exactly what the split of those will be, it's nothing to get particularly excited over yet. The i8 isn't exactly a shining example of MPG friendliness in real world conditions (high 20's to mid 30's), and even the best hybrids still have a long way to go until they can be considered clean in terms of emissions in build and lifetime operation.