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A new electric power steering (EPS) was developed which uses an electric motor to provide assistance. It is a system combinning the latest in power electronics and high power motor technologies. The development was aimed at enhancing the existing hydraulic power steering's energy efficiency, driver comfort as well as increasing active stability. This paper describies the overall concept of EPS and outlines the components and control strategies using electronics. The EPS was tested on a front wheel drive vehicle weighing 1000kg in front axle load. The results showed a 5.5% improvement in fuel economy. The EPS has also achieved returnability that gives the driver more moderate feelings matching the vehicle in action as well as the active stability control strategy for high speed driving.