If that is the part K&N specifies for the X5 (and it is) then you can-but really why would you? Regardless of the K&N marketing hype that says you will gain power, you won't-not a bit. Also, nothing filters better than the stock filter. A K&N filter will let larger dirt particles through its filter and into your engine, all for more money and no gain in power.

It's your money, but it would be wasted on a drop-in K&N filter.

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Eric Giles
'04 M3
'07 X5 3.0si
Many others.