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Powertrain system duplication for hybrid electric vehicles and range-extenders presents serious cost challenges. Cost increase can be mitigated by reducing the number of cylinders but this usually has a negative impact on noise, vibration and harshness (NVH) of the vehicle system. This paper considers a novel form of two-stroke cycle engine offering potential for low emissions, reduced production cost and high potential vehicle efficiency. The engine uses segregated pump charging via the use of stepped pistons offering potential for low emissions. Installation as a power plant for automotive hybrid electric vehicles or as a range-extender for electric vehicles could present a low mass solution addressing the drive for vehicle fleet CO2 reduction. Operation on the two-stroke cycle enables NVH advantages over comparable four-stroke cycle units, however the durability of conventional crankcase scavenged engines can present significant challenges.