For commercial CDs it comes from Grecenote.
For mp3s it comes from the tags, if you have them set and true for BT or USB connected devices. No cover art from mp3s on the harddrive even if they have the right tags (some will say they get it from the harddrive too, but I don't believe them).
2012 w204 Mercedes-Benz C350 4MATIC MY 05/2012 Obsidian Black/Sahara
2011 F10 535i xDrive MY 01/2011 Sophisto Grey/Black