Advances in battery and hybrid powertrain technology have significantly expanded the automotive design space. In this work, the design process of a new extended range electric vehicle (E-REV) is presented, following the industry standard vehicle development process (VDP). To effectively achieve the design targets, the team developed the project following a model-based design (MBD) approach which is similar to what is used in industrial practice. The design process started from a vehicle technical specification, which defines the required vehicle performance characteristics. Then models were built to exam various design options against the design targets. Improved vehicle performance was demonstrated through model-in-loop (MIL), software-in-loop (SIL) and hardware-in-loop (HIL) simulations. The designed vehicle uses a 2009 Saturn VUE as a baseline platform and incorporates a new powertrain which includes a GM 2-Mode transmission, a GM E85 flex-fuel engine, a rear traction motor and a high-capacity battery system. It achieves zero fuel consumption in charge depleting mode under normal operating conditions, while maintaining the highly efficient 2-Mode hybrid functionality in charge-sustaining mode. By integrating an additional traction motor with the 2-Mode transmission, the new design overcomes the constraints imposed by the size of the original electric motors and gearing configuration in the 2-Mode transmission, to allow the vehicle to be operated at higher speeds and loads without turning on the IC engine. The work is part of the collective efforts of the UVic EcoCAR team in the EcoCAR - Next Challenge collegiate advanced vehicle technology engineering competition.