The Lola B05/40 was developed following a change to Le Mans regulations by the Automobile Club de l'Ouest (ACO), which eliminated the LMP900 and LMP675 classes and introduced the LMP1 and LMP2 classes. The B05/40 shares various structural elements with the larger LMP1-class Lola B06/10. It can be seen as an evolution of the MG-Lola EX257, in that many mechanical and aerodynamic elements are shared between the two cars. While the front fenders appear similar in shape, there are major dimensional differences between the two cars (1000 mm over hang vs. 810 mm) such that the B05/40's fenders are bespoke to the car. The nose is raised in a fashion similar to the EX257 while lacking the opening grill at the tip, instead replaced by two large NACA ducts placed on either side of the nose. Behind the cockpit, twin rollover hoops replaced the single roll hoop which originally sat behind just the driver. The air intake for the engine is placed in a nacelle between these rollover hoops, while turbocharged cars use a large duct placed to the left side of the cockpit.
In its initial season in 2005, one B05/40 was used by Intersport Racing in the American Le Mans Series season, while Chamberlain-Synergy Motorsport, Lista Racing, Ray Mallock Ltd., and Binnie Motorsports competed in the Le Mans Endurance Series. Intersport took the LMP2 championship with five victories. Chamberlain-Synergy took the LMP2 championship in the LMES, while Ray Mallock took second and Horag fourth, with each of the three teams managing one win. At the 24 Hours of Le Mans, Ray Mallock took the LMP2 victory.
Since 2005, Lola continually upgraded the B05/40, including various bodywork upgrades for improved aerodynamics. In late 2006, a new chassis for Fernández Racing's Acura team was built, which included slight upgrades, leading to Lola terming the car B06/40. For the beginning of the 2007 season, Lola unveiled further upgrades that were used by nearly all B05/40 customers. These upgrades included a redesigned front end, which replaced the NACA ducts with a single opening in the nose.
In 2006, all of the B05/40 teams remained, although Chamberlain-Synergy's team was taken over by ASM Team Racing for Portugal midway through the Le Mans Series season. For Intersport, the American Le Mans Series LMP2 championship could not be retained due to new competition from the Porsche RS Spyder, even though Intersport scored three wins. A similar situation occurred in the LMS, with Barazi-Epsilon's Courage Competition outdoing the Ray Mallock EX264, which had one win. Although Chamberlain Synergy's chassis scored three wins during the season, their take over by ASM Team Racing for Portugal meant that the team's points were split, denying them the championship. For the 24 Hours of Le Mans, Ray Mallock again took the LMP2 victory, with Intersport, Binnie and Chamberlain-Synergy also participating.
For the 2007 season, Intersport moved to the LMP1 class with a new chassis, while Fernández Racing joined the series with an upgraded B05/40 for use with the Acura Le Mans project. B-K Motorsports also purchased a new B05/40 for use with their Mazda project, switching from a previous Courage chassis. Ray Mallock, Horag, Binnie and ASM Team Racing for Portugal all remained in the Le Mans Series, all running with the 2007 upgrades.
Various engines have been used in the B05/40, including Nicholson-McLaren V8s, Judd V8s, Zytek V8s, Acura V8s, AER turbocharged Inline-4s and Mazda turbocharged Inline-4s.