Diesel engine downsizing aimed at reducing fuel consumption while meeting stringent exhaust emissions regulations is currently in high demand. The boost system architecture plays an essential role in providing adequate air flow rate for diesel fuel combustion while avoiding impaired transient response of the downsized engine. Electric Turbocharger Assist (ETA) technology integrates an electric motor/generator with the turbocharger to provide electrical power to assist compressor work or to electrically recover excess turbine power. Additionally, a Variable geometry turbine (VGT) is able to bring an extra degree of freedom for the boost system optimization. The electrically-assisted turbocharger, coupled with VGT, provides an illuminating opportunity to increase the diesel engine power density and enhance the downsized engine transient response. This paper assesses the potential benefits of the electrically-assisted turbocharger with VGT to enable heavy-duty diesel engine downsizing. A 1D engine simulation model of the Caterpillar 7.1L 6-cylinder diesel engine has been developed and validated against engine test data taken with ETA device fitted. Both steady state and transient engine performance are evaluated with different electric power levels, motor response time and VGT vane positions. The ETA technology gives transient response benefits over a range of transient events, but with diminishing returns at the higher levels of ETA power. Better transient response and fuel consumption could be achieved by combining ETA device with VGT versus a standard fixed turbine. The importance of ETA control with fast response time during transient maneuver is highlighted. This study also demonstrates the engine speed drop is less significantly affected than recovery time over block load test by employing ETA technology. This potential limit of the requirement to have sufficient initial excess boost for downsized engine could be addressed by controlling the VGT vane position. Finally, the capability of this optimized boosting system to enable downsizing from 9.3L to 7.1L is demonstrated.