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The low-frequency line transformer in todays ac rail vehicles suffers from poor efficiency and a substantial weight. Future traction drives may operate directly from the mains without this transformer. A feasible concept for a transformerless drive system consists of series connected medium voltage converters applying modern high-voltage insulated gate bipolar transistors (HV-IGBTs). In a first design step, the switching characteristics and losses of 6.5-kV IGBTs are compared to 3.3-kV and 4.5-kV IGBTs which are already commercially used in traction applications. Based on the considered HV-IGBTs, the properties of multilevel converters are analyzed and their applicability to the transformerless system is evaluated. The paper focusses on a loss analysis of the converters. Reliability aspects and harmonic spectra are briefly discussed. Taking these design aspects into account, the three-level neutral point clamped converter turns out to be a reasonable solution to realize line and motor converter modules in a transformerless traction system.