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This paper describes the motivation for developing hydrogen-fueled engines for use in hybrid electric vehicles of the future. The ultimate motivation for using hydrogen as an energy carrier is carbon management. However, air quality concerns also provide motivation for developing hydrogen-fueled vehicles. For this reason, we discuss the position of the hydrogen-powered hybrid vehicle within the California Air Resources Board requirement for Zero Emission Vehicles. We describe the expected performance of an electrical generation system powered by a four-stroke, spark-ignited, internal combustion engine for a hydrogen-powered hybrid vehicle. The data show that the engine-out emissions of NOx will allow the vehicle to operate below the Super Ultra-Low Emission Vehicle standard set by the California Air Resources Board. The engine can run on either hydrogen or blends of hydrogen and natural gas. The engine can be optimized for maximum efficiency with low emissions.