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Hybrid electric vehicles have proved to be the most practical solution in reaching very high fuel economy as well as very low emissions. However, there is no standard solution for the optimal size or ratio of the internal combustion engine and the electric system. The optimum choice includes complex tradeoffs between the heat engine and electric propulsion system on one hand and cost, fuel economy, and performance on the other. Each component, as well as the overall system, have to be optimized to give optimal performance and durability at a low price. In this paper, we look at the effects of hybridization on fuel economy and dynamic performances of vehicles. Different hybridization levels from mild to full hybrid electric traction systems are examined. We also present the optimum level of hybridization for typical passenger cars. This study shows that low hybridization levels provide an acceptable fuel economy benefit at a low price, while the optimal level of hybridization ranges between 0.3 and 0.5, depending on the total vehicle power.