Although the N20 is a four-cylinder engine, it is considered a replacement for the naturally aspirated six-cylinder N52/N53 because it powers equivalent models, producing similar horsepower to the N52/N53 with greater low-rpm torque and better efficiency.

It has been well documented in online forums, that thousands of early production N20 engines were manufactured with faulty internal plastic timing chain guides.

Upon failure of these internal plastic components, the timing chain slackens (becomes loose) and "skips time" by jumping teeth on upper cam shaft sprocket, a phenomenon that causes catastrophic damage to the engine by changing the piston-to-valve synchronization and causing these parts to contact each other.

In 2017, a class action lawsuit[4] was filed by several owners against BMW seeking redress for the faulty units.

Plaintiffs in the BMW engine defect class action seek to represent a nationwide Class of consumers affected by timing chain guide and secondary chain failure and wear as well as several subclasses for states such as New Jersey, Illinois, Florida, Utah, New York, Colorado, Texas, Alabama, Oklahoma, Massachusetts, California, Wisconsin, Oregon and North Carolina.