It should not be surprising that the most important attribute of today's hybrid propulsion system is that total driveline efficiency exceed 80%. When vehicle fuel economy is in excess of 40mpg, a 100 W power loss due to core heating in the traction motor or its attendant power inverter represents a significant impact. Weight is another very important attribute, but its impact is not as noticeable until performance on grades is required. This chapter provides an assessment of the complete hybrid drive system and where the prominent loss mechanisms reside. Particular attention is paid to the traction M/G core and copper losses and the inverter conduction and switching losses. Mechanical friction contributions are noted, particularly with regard to non-conventional designs due to adding the hybrid components.