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The application of silicon carbide (SiC) devices as battery interface, motor controller, etc., in a hybrid electric vehicle (HEV) will be beneficial due to their high-temperature capability, high-power density, and high efficiency. Moreover, the light weight and small volume will affect the whole powertrain system in a HEV and, thus, the performance and cost. In this paper, the performance of HEVs is analyzed using the vehicle simulation software Powertrain System Analysis Toolkit (PSAT). Power loss models of a SiC inverter based on the test results of latest SiC devices are incorporated into PSAT powertrain models in order to study the impact of SiC devices on HEVs from a system standpoint and give a direct correlation between the inverter efficiency and weight and the vehicle's fuel economy. Two types of HEVs are considered. One is the 2004 Toyota Prius HEV, and the other is a plug-in HEV (PHEV), whose powertrain architecture is the same as that of the 2004 Toyota Prius HEV. The vehicle-level benefits from the introduction of SiC devices are demonstrated by simulations. Not only the power loss in the motor controller but also those in other components in the vehicle powertrain are reduced. As a result, the system efficiency is improved, and vehicles that incorporate SiC power electronics are predicted to consume less energy and have lower emissions and improved system compactness with a simplified thermal management system. For the PHEV, the benefits are even more distinct; in particular, the size of the battery bank can be reduced for optimum design.