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At Nissan we have developed a new parallel hybrid system for rear-wheel-drive hybrid vehicles. 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 be within the length allowed for the powertrain. Therefore, new technologies have been developed such as high-density, square-shaped windings and an optimized magnetic circuit specially designed for concentrated winding motors. The inverter is sized to a 12V battery, which it replaces in the engine compartment. Despite its compact size, the inverter must have rather large current capacity to drive a high-power motor. Heat management is critical to the design of a small but high-power inverter.