Due to global trends and government regulations for CO2 emission reduction, the automotive industry is actively working toward vehicle electrification to improve fuel efficiency and minimize tail-pipe pollutions. Silicon IGBTs and power diodes used in today’s HEV inverter systems are mature and reliable components, but have their limitation on energy losses. SiC, on the other hand, has potential to offer additional boost of efficiency for the HEV drive system. In recent years, commercial SiC MOSFETs have improved significantly in performance. However, reliability concerns and high prices still limit their overall competitiveness against silicon. Ford Motor Company has partnered with semiconductor manufacturers to evaluate SiC products for automotive applications. In this study, 900V SiC MOSFET modules from Wolfspeed are tested and compared with an 800V silicon IGBT module of similar power handling capability. SiC devices were found to have lower power losses during light-load conditions. Furthermore, faster switching speed with optimized packaging and gate driver configuration resulted in substantial reduction of switching losses, although the implications on module manufacturability and cost should be further evaluated. Potential fuel economy benefits on the vehicle level are predicted by simulation over designated drive cycles. In light of the opportunity for next-generation power devices, new challenges need to be addressed, such as system compatibility, switching oscillation, protection methods, component cost, and reliability verification. Should these issues be successfully mitigated, SiC MOSFETs will be attractive for the automotive electric drive system application.