The design criteria for modern sustainable development of vehicle powertrain are the high energy efficiency of the conversion system, the competitive cost and the lowest possible environmental impacts. In this article a multi-objective optimization methodology is applied on hybrid electric vehicles study in order to define the optimal powertrain configurations of the vehicle, estimate the cost of the powertrain equipment and show the environmental impact of the technical choices on the lifecycle perspective of the vehicle. The study illustrates optimal design solutions for low fuel consumption vehicles – between 2L/100km and 3L/100km. For that a simulation model of a hybrid electric vehicle is made. This model is coupled with a cost model for the vehicle. The techno–economic optimizations are performed for two case studies, illustrating the possibilities of the optimization superstructure. Firstly the life cycle inventory is written as a function of the parameters of the techno–economic model. In this way, the obtained environmental indicators from the life cycle assessment are calculated as a function of the decision variables for the vehicle design. In the second example the parameters of the energy distribution function are included as decision variables in the techno–economic optimization and are simultaneously optimized.