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The selection of the system voltage in electric and hybrid electric vehicles is one of the most important factors in determining the overall system's efficiency and cost. This optimal voltage level can only be determined by treating the vehicle as a complete system, including all of the interactions between the various subsystems. This paper attempts to answer the question: "What is the optimal voltage for an electric or hybrid electric vehicle as a function of its power requirements?" This question is answered by developing models and evaluating the interaction between the various components and subsystems in a vehicle. From this analysis relationships are identified between system packaging, power, cost and efficiency that can be used to optimize the voltage level and to start the discussion of standardization of system voltage rating as a function of power rating.