Significant improvements in automotive fuel economy have been demonstrated by performance simulation of vehicles using the Vadetec Inertial Driveline. The novel driveline arrangement based upon a continuously variable-ratio mechanical transmission and the strategy for controlling the powertrain are discussed in this paper. The influence of CVT speed ratio range and efficiency on fuel economy is studied. The results of the performance simulation for a typical vehicle equipped with the Inertial Driveline are shown. These results indicate a 44% improvement in fuel economy when compared with the performance of the same vehicle equipped with a conventional driveline operating on the same duty cycle.