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This paper describes the motor and inverter of Nissan's newly developed parallel hybrid system for rear-wheel-drive hybrid vehicles. The new system incorporates a high-power lithium-ion battery and a one-motor-two-clutch powertrain to achieve both highly responsive acceleration and better fuel economy. As the main components of the hybrid system, both the motor and the inverter have been developed and are manufactured in house to attain high power density for providing responsive acceleration, a quiet EV drive mode and improved fuel economy. Because the motor is located between the engine and the transmission, it had to be shortened to stay within the length allowed for the powertrain. The rotary position sensor and clutch actuator are located inside the rotor to meet the size requirement. High-density winding of square-shaped wire and a small power distribution busbar also contribute to the compact configuration.