This paper will incorporate product development methodology from the FED program where AVL is responsible in collaboration with World Technical Services Inc., for delivering a fully developed hybrid propulsion system integrated into the demonstrator vehicle. Specifically, the paper will discuss via case study the unique methodology employed by AVL Powertrain to develop, validate, and integrate our hybrid propulsion system into the FED vehicle. Content will include traditional and virtual powertrain development methodologies that maximize product development efficiency, ensure a robust final design, and minimize development costs. Hybrid controls development, calibration techniques and vehicle design issues will also be discussed.