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In this paper, an innovative power-split device (PSD) is introduced, and its application in a hybrid powertrain system is studied. The new PSD is a mechanism that allows operation in two different power-split modes through locking/unlocking of two clutches. In one mode, the PSD operates similar to a standard planetary gear unit, and in the other mode, it works the same as a compound planetary set. A well-known analogous system is the Toyota Hybrid System (THS) and is used for comparison purposes. It is demonstrated that by the new system, the transmission losses are reduced by a considerable extent, and thus, the efficiency is improved. A controller is designed based on fuzzy logic, which receives the battery state of charge (SOC), the vehicle speed, and the power that is requested at the wheels to coordinate each component in such a way as to optimize the entire system efficiency. A numerical optimization algorithm is applied to sustain the SOC in high regions and shift engine operating points to higher efficiency regions. Simulation results demonstrate notable improvements in fuel economy and performance characteristics.