A new performance simulation capability has been developed for powersplit HEVs to enable analytical assessment of new engine technologies in the context of HEV system operation and to analyze/understand important system dynamics and control interactions affecting HEV performance. This new capability allows direct simulation with closed-loop controls and the driver, is compatible with Ford standard HEV system simulation capabilities and enables simulation with multiple levels of model fidelity and feature content across the vehicle system. The combined plant Vehicle Model Architecture (VMA) in Simulink was used for the infrastructure. The simulation capability includes a Dymola model of the powersplit transaxle, a Vehicle System Control (VSC) model implemented in Simulink, a high fidelity 2L Atkinson GT-Power engine model, and a simplified representation of the engine controls in Simulink. Also, the simulation capability interfaces to Ford standard vehicle data sets for HEVs through a Matlab interface. A GT-Power Fast Running Model (FRM) for the 2L Atkinson engine was also developed and used in the vehicle simulation in order to speed up the simulation time. The model results were validated with performance test data for the 2L Atkinson engine in a prototype Ford Fusion HEV.