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Today’s transportation is quickly transforming with the nascent advent of connectivity, automation, shared-mobility, and electrification. These technologies will not only affect our safety and mobility, but also our energy consumption, and environment. As a result, it is of unprecedented importance to understand the overall system impacts due to the introduction of these emerging technologies and concepts. Existing modeling tools are not able to effectively capture the implications of these technologies, not to mention accurately and reliably evaluating their effectiveness with a reasonable scope. To address these gaps, a dynamometer-in-the-loop (DiL) development and testing approach is proposed which integrates test vehicle(s), chassis dynamometer, and high fidelity traffic simulation tools, in order to achieve a balance between the model accuracy and scalability of environmental analysis for the next generation of transportation systems.