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Due to stricter emission regulations and more environmental awareness, the powertrain systems are moving toward higher fuel efficiency and lower emissions. In response to these pressing needs, new technologies have been designed and implemented by manufacturers. As a result of increasing complexity of the powertrain systems, their control and optimization become more and more challenging. Virtual powertrain calibration, also known as model-based calibration, has been introduced to transfer a part of test bench testing into a virtual environment, and hence considerably reduce time and cost of product development process while increasing the product quality. Nevertheless, virtual calibration has not yet reached its full potential in industrial applications. Volvo Penta has recently developed a virtual test cell named VIRTEC, which is used in an ongoing pilot project to meet the Stage V emission standards.