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A key factor influencing the performance of a hybrid electric vehicle (HEV) is how the engine and motor-generator (MG) are combined with the vehicle. There have been several types of combinations such as power transfer by using the mechanical transmission of conventional vehicles or the electrical transmission originally designed for HEVs. The objectives of this research were to clarify fuel economy characteristics according to the type of power transfer system used and to identify the requirements for MG system development by analyzing MG operation conditions in each power transfer mode. HEV systems for passenger car use were modeled on the basis of a functional classification. Simulations were conducted using the characteristics of the power transfer systems as parameters to evaluate fuel economy tendencies under several driving modes. The mechanism of the fuel economy tendencies was then analyzed to evaluate quantitatively the effect of each power transfer system on fuel economy.