To help respond to growing customer demand for environmentally friendly vehicles, a new transaxle for plug-in hybrid vehicles (PHVs) has been developed that achieves excellent fuel economy and ensures high performance when the PHV operates in electric vehicle (EV) mode. Under the basic concept of sharing a large number of parts with the transaxle in the all new Prius, the newly designed PHV transaxle was developed with the aim of enhancing EV power and range. To achieve our goal, the new transaxle uses a Dual Motor Drive System that operates the generator as a motor to supplement the existing motor. It also features an electrical oil pump (EOP) that improves cooling performance in EV mode. The developed transaxle helps to advance the PHV as a key next-generation environmentally friendly vehicle by maximizing the performance of the Toyota Hybrid System (THS) and achieving even better dynamic EV mode performance than the new Prius HV.