The main difference between hydraulic and electric power steering systems is in the method of generating the power assistance force that reduces the amount of force that the driver has to apply to the steering wheel.
Hydraulic power steering systems feature a pump that is driven either by a belt running off the engine or by an electric motor. The pump is part of a hydraulic system which generates the fluid pressure/flow that is used to produce the power assistance for steering.
Electric power steering systems produce the power assistance force directly by means of an electric motor that transmits its torque either to the steering column or the steering gear. Therefore, such systems generally require extra gearing to connect the electric motor to the existing steering system components.
Otherwise, the basic design of the steering system is the same (e.g. rack-and-pinion steering gear for both hydraulic and electric power steering systems).
The steering characteristics, e.g. amount of steering force required, progression of steering force, feedback from the roadwheels, are subject to strict development specifications that have resulted in continual optimization of the hydraulic power steering systems so far used. The new electric power steering systems have to match up to the outstanding steering characteristics of BMW vehicles BMW owners have come to experience.