The 27-year-old male driver and the 37-year-old passenger remained in critical condition late Tuesday night. Their identities were withheld pending notification of the victims' families.
Investigators believe the driver saw the train but still tried to beat it.
"It looks like he went directly underneath that arm that was coming down. Why, we certainly don't know," said Anaheim Police Sgt. Rick Martinez.
Rescuers freed the trapped men from the accident and transported them to UC Irvine in critical condition.
The BMW was torn to pieces by the impact. Debris from the crash was strewn across the roadway, with one wheel flying about 40 yards from where the crash occurred.
Investigators believe all the warning devices were working properly. Residents in the area said they can't understand how anyone would try to beat the train.
"I see it on TV all the time, and you think about how crazy people are, what happens, but when you see it in life, it's a whole different situation," said witness Max Martinez.
In the wreckage, authorities found a full suitcase and believe the victims may have been rushing to the airport.