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Upcoming, increasingly stringent greenhouse gas (GHG) as well as emission limits demand for powertrain electrification throughout all vehicle applications. Increasing complexity of electrified powertrain architectures require an overall system approach combining component technology with integration and industrialization requirements when heading for further significant efficiency optimization of the subsystem internal combustion engine. The requirements on the combustion engine in hybrid powertrains are quite different to those in a conventional powertrain solution. Next-generation hybrid engines, with brake thermal efficiency (BTE) targets starting from 42-43% and aiming for 45% and above within the product lifecycle, require a re-thinking of the base engine architecture of current modular engine platforms. At the same time focus on the product cost and minimized additional investment demand reuse of current production, machining and assembly facilities as far as possible.