Hardware-in-the-Loop (HIL) simulation is a technique used extensively in the development and testing of complex real-time embedded systems. Most of the HILs built around the world focus on specific part of a vehicle. This paper describes an in house HIL system developed for the complete hybrid car. In this HIL, the focus was to have HIL based on open hardware which is low cost and modular. It is customizable as per complex interdisciplinary vehicle requirements from Original Equipment Manufacturer that reduces dependency on suppliers and allows testing in an integrated vehicle environment. Code for operating HIL is developed in house. This HIL allows engineers to access ECU and plant model simultaneously and generate test report automatically. It consists of a vehicle plant model developed using MathWorks® Tool chain-MATLAB and Simulink. FPGA Plugin consist of software implementation of vehicle sensors in LabVIEW™ software from National Instruments (NI). NI VeriStand™ provides interface between LabVIEW code and plant model. Each release of vendors' software and functional safety checked in HIL, in an integrated and automated manner, before releasing to production line. This reduces bugs in field and eventually saves money and time to market. Because of early algorithm proving in vehicle development lifecycle, time and resources are saved. HIL has reduced tedious and cumbersome ECU testing on physical vehicle. Functional safety and performance related test cases have been prepared and executed to check redundant safety and fail safe functionality in ECUs, required to meet ISO 26262 standard.