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PLEASE READ THIS (I GOT MY ISSUE RESOLVED WITH THE ELECTRIC FAN, maybe this can help someone in the future)

i've had the fan stop working on me during traffic, car overheated, no engine codes, no CEL, when i plugged in the BMW software, it gave a code for Fan Activation. I tried activating the fan but it didnt work, so i bought a new electric fan, when i installed it, i tested it using the BMW software, it worked fine, and continued so for a week, til overheat again. i plugged the car again to the computer, tried to activate the fan using the software, didnt work... went to the parts store, got another fan under warranty, it worked for a couple of days, and died again. being sure that it's not the fan anymore, i doubted the signal wire running from the car wiring harness to the fan. it is really hard to check the signal on that, the strange and funny thing is that it was showing some signs of life when i plug in the multimeter to the signal wire (green and black, thin wire running from the car harness to the fan connector) so i assumed that it was working fine... never assume something with BMWs, that's what i learned.
the next day, car overheated again while being stuck in traffic, i had to pull over and just wait for traffic to ease off so i can drive the car at speeds where the temperature is more steady til i get it home... i got fed up and checked the diagram, traced the Signal Wire (the Green and Black wire) to the (ECM) Engine Control Module connector and found it to be Pin #4 on the circuit diagram for the electric fan (look up "electric fan E46 Circuit Diagram", on the web, you will find it), unplugged the connector at the fan, and the other end at the ECM, checked continuity of that wire, only to find a 1K Ohm resistance on that line, which, after discussing with an electrical engineer friend, found it to be suspiciously too high) i spliced the wire from the engine control module (ECM) to the electric fan connector, it worked, i've been driving the car now for few days with no issues, and the fan does come on much more than it used to before... also, note this: i had tested my old fan (i didnt throw it out), and it turned out that there was nothing wrong with the original BMW electric fan, it fired right up...

I really hope that this can help someone in the future...
by the way: the AC used to cut off when i'm at a stop in traffic, i thought i had a problem with my AC, but it turned out that once i fixed the fan issue, the AC problem disappeared
also note: when i say the car overheats, i was suspecting something wrong when the AC was working normally and it shuts off at stops... so i didnt let the heat reach more than 3/4 at the heat gauge, i always turned it off before it went into the Red Zone.
 

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Please read two posts up... it might help you and its really easy to do... and you will only need relatively simple tools and a multimeter... and if it turns out to be the wire, then all you need is a new wire...
 

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Mine did that too, I felt that it wasn't working right, but with time, it just completely stopped... it was a slow deterioration of the signal (it seems)...
When the resistance increases in the wire, it appears to still deliver a signal but not for all 4 speeds of the fan...
 

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There is no easy way to tell, if you put direct power to the terminals, they will not power the fan, as it needs the signal from the small wire (small wire is the one that controls the speed of the fan, it basically takes a signal from the ECU)
what i did is that i deciphered the ECU terminal number, then got a volt metere to measure resistance in the wire (the small wire) from the ECU to the Fan plug (just to see if the resistance is high, which means that there is in fact a disruption), i found the resistance to be high, so i decided to just introduce a new wire (i cut the old wire from both ends, and plugged it, just in case...) and then routed the new wire from the ECU to the fan plug, it worked. i hope that this helps you resolve your issue.
 
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