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In hybrid electric vehicles (HEV), a battery-powered three-phase inverter is used to drive the traction motor. Due to the switching behavior of this inverter, significant harmonic currents are present on the DC side of the inverter. Traditionally, a bulky capacitor is used to filter these harmonics. In this paper, an active filtering method is evaluated to substitute for the DC bus capacitor. The active power filter (APF), composed of power electronic switches and an inductor, works as a current-source inverter. The operation principle of the proposed method is described and implemented in Matlab/Simulink. The method has been proposed before but the practical feasibility of this method has not been evaluated. In this paper, several crucial design parameters in association with the filtering effect, such as voltage band and the values of the inductor and the smoothing capacitor are identified, and the dependence of system performance on these parameters is illustrated. Finally, the underlying problems for practical implementation are discussed.