This paper describes the design of an AC propulsion system for an electric vehicle, including a three-phase induction motor, transistorized PWM inverter/battery charger, microprocessor-based controller, and two-speed automatic transaxle.This system was built and installed in a Mercury Lynx test bed vehicle as part of a Department of Energy propulsion system development program.Design information on the transaxle is given. Integration of the transaxle to meet system needs is described.An integral part of the inverter is a 4-kw battery charger which utilizes one of the bridge transistors. The overall inverter strategy for this configuration is discussed. The function of the microprocessor-based controller is described. Typical test results of the total vehicle and each of its major components are given, including system efficiencies and test track performance results.