Optimal design of a large and complex vehicle such as a truck can only be accomplished by decomposition. In simulation-based design, this decomposition is dictated by the availability of models. In most cases, model-based decomposition results in a hierarchical structure: the vehicle is decomposed into systems, the systems into subsystems, the subsystems into components, and so on. Analytical target cascading (ATC) (Kim, 2001) is a methodology developed for use during the early development phase of large and complex systems to propagate desirable overall product targets to appropriate individual specifications for the various subsystems and components in a consistent and efficient manner. Consistency requires that all parts of the optimally designed system should work well together. Efficiency aims at reducing/avoiding design iterations at later stages, which are costly in time and resources. The analytical target cascading process has been applied to the optimal design of an advanced heavy truck. A bi-level model hierarchy was defined with the truck modelled at the top level and the engine and suspensions modelled at the bottom level. Novel technologies, such as a series hybrid-electric propulsion system, in-hub motors, and variable height suspensions were introduced with the intention of improving both commercial and military design attributes according to a dual-use philosophy. Emphasis was given to fuel economy, ride, and mobility characteristics. Three types of battery were considered to study their effect on fuel economy, and an aggressive driving schedule was used to assess regenerative braking benefits and ride quality. A composite optimisation technique was used to avoid convergence to local optima. Design targets were translated to system specifications for the engine and the front and rear suspensions that ensure consistent optimal truck design. The fuel efficiency target was exceeded, achieved, and missed by 3 per cent when using Lead-Acid, Lithium-Ion, and Nickel-Metal Hydride batteries, respectively. The ride quality and performance targets were exceeded and met for any of the considered battery types, respectively. It is important to keep in mind that the findings of this case study depend on the defined driving cycle, operating and environmental conditions, hybrid power management and control strategies, and target values. Therefore, it is necessary to consider a variety of the aforementioned parameters to draw final conclusions. However, this extensive case study has demonstrated that the analytical target cascading process is quite useful in determining system design specifications that result into overall system optimality and consistency.