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In this paper, a novel algorithm of space vector modulation (SVM) for the three-level inverter is proposed. The proposed algorithm avoids the abrupt change of output vector during the process of desired vector changing from one region to another. For the selection and switching-time computation of the output vectors are under the stationary α-β coordinate, the algorithm is easily achieved with the simple arithmetical operation and avoided the operation of the trigonometrical function. On the other hand, a convenient method is proposed to achieve the neutral point potential stability. Finally, the simulative and experimental results confirmed the validity of the proposed algorithm.