Upgrade Your Stock BMW E36 LSD With Porsche Parts!


Most BMW E36s came with a limited-slip differential, but one that had only two clutches. This means that the LSD sends only up to 25% of power to the wheel that isn’t slipping. Although 25% is better than nothing, a better power distribution is always welcome. That’s why many owners of these BMWs decide that a BMW E36 LSD upgrade is in order.

The whole process involves using parts from a Porsche LSD that features three clutches, and installing them into your stock BMW E36 LSD. Today we’ll discuss the benefits of this upgrade, what parts you’ll need to get it done, and how to get it done at home!
BMW E36 LSD Upgrade Step 1Article updated on 11/24/21. Original publishing date 06/21/18

What Is A Limited Slip Differential?

A limited-slip differential, or LSD for short, is a type of differential that allows the wheels to run at different speeds but limits the difference in power distribution between the two wheels. A standard LSD in a BMW E36 will send at least 25% power to the wheel with no traction, which is a great feature for a track day, but to be able to tackle corners more efficiently and get the most speed while exiting the corner, this percentage should be even higher.

When it comes to factory settings, there are three types of limited-slip differentials available. A mechanical or clutch-based LSD, a viscous LSD, and a torque-sensing LSD. Each of these types has its pros and cons. For the purposes of this guide, we’ll stick to clutch-based LSD.

What is a Clutch-based Limited-Slip Differential?

The clutch-based LSD is the most common design found in road cars. It’s similar to an open diff but has slight differences that make it better for the track.

The clutch-based LSD uses a set of plates and discs to increase the power sent to the slipping wheel. In a BMW E36, a standard 2-clutch LSD sends up to 25% power to the wheel with less traction. Porsche on the other hand, has the same type of LSD but with three clutches and sends up to 40% power to the wheel with less traction.

The clutches in this type of limited-slip differential are used to fight the difference between wheel speed and the different settings inside the clutch-based LSD. This is done by a number of clutches and springs that cause friction and there’s a certain amount of torque required to overpower it.

Different carmakers insert different numbers of plates in their LSD systems that required more or less power to overpower the friction. Three or more plates are used in performance vehicles since every second counts when you’re on a track. Such LSDs are rare on road cars, at least older BMWs.

Why Should You Consider a BMW E36 LSD Upgrade?

If you’re using your E36 as a daily driver, there isn’t much of a practical reason why you should invest in an E36 LSD upgrade. That is, unless you’re already rebuilding your diff at which point you might as well treat yourself.

On the other hand, if you’re using your E36 as a track car, or you simply want it to handle better, you’ll be able to cut valuable seconds off your lap time with this upgrade.

The limited-slip differential requires maintenance, and when it comes to the two-clutch LSD, the plates are worn more easily when the car is pushed to its limits. The great thing is that you won’t need to lay down a lot of money to do the conversion because the factory LSD on the BMW E36 can fit three plates as is.

Upgrading your BMW E36 from two-clutch LSD to three-clutch LSD isn’t a difficult process if you don’t mind getting your hands dirty, and here’s how you can do it and what you’ll need.

How to Perform a BMW E36 LSD Upgrade

Due to the fact that upgrading from a two-clutch to a three-clutch LSD doesn’t require significant investments, here’s a detailed parts list followed by a step-by-step process on how to perform this great upgrade yourself.

Parts Required for the E36 LSD Upgrade

Before starting the upgrade process, you’ll need to acquire some parts. For the three-clutch upgrade on the BMW E36 LSD, you’ll need:

8x M8x16 Carrier cap bolts 33147740005 (eEuroparts upgraded 12.9 bolts are 91290A418)

3x LSD clutch plates 92833255100

3x LSD dog ear plates 91733255211

Prep Stage

Before starting any type of work on your car, make sure that you’ve secured it. Do your due diligence and eliminate any possibility of serious injury, especially if you don’t have a professional lift available. Working under the car can be dangerous, so double-check everything before crawling under your rig.

Step 1- Removing The LSD Unit From The Differential

After securing the car and placing it on jack stands, you need to remove the LSD unit from the differential. We’ve already covered this process in one of our previous articles. It’s not a complex job, but it takes some work.

Step 2 – Soak the New LSD Clutch Plates In Differential Fluid

BMW E36 LSD Upgrade Step 2When new, clutch plates are dry. You’ll need to soak the new clutch and dog ear plates in differential fluid for at least 30 minutes before installing them.

This should be done before you start disassembling the LSD unit, so by the time you get to the part where you need to fit the new parts, they’ll be ready.

Step 3 – Remove the LSD Carrier Cap

BMW E36 LSD Upgrade Step 3
Moving in a star pattern, gently undo the bolts of the carrier cap. Try to be as gentle as possible because these bolts can strip easily which will only complicate the process and make it more time-consuming. Also, make sure to get 12.9 replacement bolts in case you’ll need to weld a few of them to remove the carrier cap.

Once you remove all the bolts, remove the carrier cap carefully, and remove the washers, making sure you set them in the proper order.

Step 4 – Remove All The Parts From The LSD Unit

BMW E36 LSD Upgrade Step 4
After getting the carrier cap off the unit, you’ll need to remove all the parts from the unit. Do this slowly, cleaning every part with a microfiber towel and placing each part in order, so you’ll know how to put everything back. You’ll find a clutch disk on each side of the geared center of the LSD unit.

At this moment, it would be a good idea to replace the clutch disks because they wear down, and they’ll work better with the new additional clutch disk.

Step 5 – Remove The Spacer From The Bottom Of The LSD

BMW E36 LSD Upgrade Step 5
Once you start removing the parts from the LSD unit, you’ll come across a 4 mm thick spacer at the bottom of the unit. This spacer needs to be removed because it will be replaced with a new clutch and dog-ear plate. Once removed, check if the spacer is 4 mm thick.

Step 6 – Start Reassembling The LSD Unit

BMW E36 LSD Upgrade Spacer

This is the spacer we will be replacing with an additional clutch

As mentioned in the previous step, the 4 mm spacer from the bottom of the LSD unit needs to be removed, so the third clutch plate can be installed to the existing BMW E36 diff.

BMW E36 LSD Upgrade Spacer 1

The spacer is 4 mm wide

Note that the clutch and dog-ear plate won’t be fitted to the exact same position as the spacer was. The new clutch and dog-ear plate will be positioned below the spider gear assembly.

This means that you’ll need to place three small washers first, the Belleville spring or cone-shaped washer, and only then the two sets of clutches and dog ear plates.

Step 7 – Reassemble The Rest Of The Differential

BMW E36 LSD Upgrade Step 6
If you followed the steps, you know we mentioned to set aside each and every part in the order you removed them. This is because the reassembly requires you to install everything in reverse order.

The thing you should know is that every part should be lightly coated in differential oil before being reinstalled.

The new clutch and dog ear plates should be fitted on the top side of the spider gear assembly.

Step 8 – Bolting It All Back Together

When you get to the part where the unit cap needs to be fitted back, finger-tighten the 8 bolts that secure it. In an alternating star pattern, tighten each bolt only by a quarter of a turn, so you slowly torque it down. By tightening the bolts faster, there’s a good chance you’ll cause damage to the cap due to uneven pressure on different sides.

Because you need to tighten the bolts at such a slow pace, expect this step to take a while.

If you want to secure the LSD unit cap even further, you can remove one bolt at a time, but only after tightening them all first. You can use some blue Loctite threadlocker on them and torquing them back to 30 ft-lb, again, in a star pattern.

Step 9 – Fit The Differential Back To The Car

The last step is to fit the differential back to the car. Check Step 1 for a link to our separate how-to guide.

Use Quality Parts!

Doing a BMW E36 LSD upgrade is a great way to make your car more responsive. However, it’s also a great opportunity to use quality Genuine, OEM or aftermarket parts to refresh your diff.

Here at eEuroparts.com, we carry a wide range of car parts for BMW and other European car brands. All you need to do is select your car using our online shop navigation tool, and you’ll be presented with a list of parts that perfectly match your vehicle!

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