The 109-002 had a very sophisticated contra-rotating compressor design intended to eliminate torque, but was abandoned in favour of the simpler engine, which in the end proved to have enough development problems of its own.

Construction began late in the same year and the engine ran for the first time in August 1940,[3] but produced only 330 lb (150 kg) thrust, just half what was desired.

The few Messerschmitt Me 262 A-1b test examples built used the more developed version of the 003 jet, recording an official top speed of 500 mph (800 km/h).

The Me 262A-1a production version used the competing Jumo 004, whose heavier weight required the wings to be swept back in order to move the center of gravity into the correct position.

)[8] Through 1944 the 003's reliability improved, making it a suitable power plant for air frame designs competing for the Jägernotprogramm’s light fighter production contract.

[14] At Kolbermoor, location of the Heinkel-Hirth engine works, the Fedden Mission, led by Sir Roy Fedden, found jet-engine manufacturing was simpler and required lower-skill labor and less sophisticated tooling than piston engine production; in fact, most of making of hollow turbine blades and sheet metal work on jets could be done by tooling used in making automobile body panels.

Only about 500 examples of the BMW 003 were built,[13][verification needed] but the Fedden Mission postwar estimated total German jet engine production by mid-1946 could have reached 100,000 units a year, or more.

Its original purpose would have been to re-engine the Panther tank with a turboshaft-based power system capable of up to a 1,150 PS usable shaft horsepower rating into an AFV's drivetrain, from an engine weight of only 990 lb (450 kg), giving it a 27 hp/ton power-to-weight ratio — just over twice the factor that the Panther's original gasoline-fueled Maybach V12 piston engine provided.

Blueprints for BMW engines had been seized by Soviet forces from both the Basdorf-Zühlsdorf plant near Berlin and the notorious Mittelwerk slave labor facility near Nordhausen.

Production of the 003 was set up at the "Red October" GAZ 466 (Gorkovsky Avtomobilny Zavod, or Gorky Automobile Plant) in Leningrad and in Kuznetsov along KMPO, where the engine was mass-produced from 1947 under the designation RD-20 (reactivnyi dvigatel, or "jet drive").