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This paper summarized the first phase research work to develop hybrid transit buses for China, including driving cycle analysis, performance requirements setting, key components first dimensioning, configuration choosing, saving potential estimate and parametric study. Through these fundamental works, we realize that (1) the Chinese urban bus cycle has some specialties compared with foreign ones, and these specialties cause differences on the design criteria and design results of the hybrid buses; (2) the parallel configuration is better than the series one for the Chinese cycle from both fuel consumption and cost points of view.