The development of power electronics and electric machinery presents significant challenges to the advancement of electric and hybrid vehicles. Electronic components and systems development for vehicle applications have progressed from the replacement of mechanical systems to the availability of features that can only be realized through interacting electronic controls and devices. Near-term applications of power electronics in vehicles will enable integrated powertrain controls, integrated chassis system controls, and navigation and communications systems. Future applications of optimized electric machinery will enable highly efficient and lightweight systems. This paper will explore the areas where research and development is required to ensure the continued development of power electronics and electric machines to meet the rigorous demands of automotive applications. Additionally, recent advances in automotive related power electronics and electric machinery at Oak Ridge National Laboratory will be explained. 3 refs., 5 figs