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Plug-in hybrid electric vehicles (PHEVs) are one of the solutions to the increasing environmental concerns and emission standards across the globe. Unlike conventional vehicles, they have charge sustaining capability, thus enabling them to use their stored electrical energy during the charge depleting mode, in turn decreasing the amount of fuel consumption. PHEVs have the provision of an off-board recharging facility in addition to the on-board chargers. Since the amount of electrical energy stored in PHEV is limited, it is important to have an optimal energy distribution among the internal combustion engine (ICE) and the motor in order to improve the fuel efficiency. In this paper, models for each component of a series-parallel HEV are developed and simulated in the case of Toyota hybrids during different driving conditions such as braking, acceleration, and deceleration for a given driving schedule. The power consumption is estimated for every instant. An algorithm can be developed in order to ensure that vehicle is driven mostly in the electric mode and/or in the most efficient operating range of the ICE. The developed vehicle model has been designed in order to validate real-time information of the driving conditions accessible by GPS. This would lead to the optimization of the available energy sources, thus reducing fuel consumptions and the consequent emissions.