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This paper introduces a new set of methods to directly integrate ultracapacitor banks into cascaded multilevel inverters that are used for large vehicle propulsion. The idea is to replace the regular dc-link capacitors with ultracapacitors in order to combine the energy storage unit and motor drive. This approach eliminates the need for an interfacing dc-dc converter and considerably improves the efficiency of regenerative braking energy restoration in large vehicles using multilevel converters. Utilizing the proposed modulation control set, the two cascaded inverters can have their dc voltage levels maintained at any ratio (even a noninteger ratio) or dynamically varied over a wide range without disrupting the normal operation of the electric motor. As an advantage, ultracapacitor voltage or state of charge can be freely controlled for braking and/or acceleration power management. A regenerative energy management scheme is also proposed based on the vehicle's speed range considerations. Detailed simulation and experimental results verified the proposed methods.