The project began under a corporative agreement between Mack Trucks, Inc and the Department of Energy starting from September 1, 2005. The major objective of the four year project is to demonstrate a 10% efficiency gain by operating a Volvo 13 Litre heavy-duty diesel engine at a constant or narrow speed and coupled to a continuously variable transmission. The simulation work on the Constant Speed Engine started on October 1st. The initial simulations are aimed to give a basic engine model for the VTEC vehicle simulations. Compressor and turbine maps are based upon existing maps and/or qualified, realistic estimations. The reference engine is a MD 13 US07 475 Hp. Phase I was completed in May 2006 which determined that an increase in fuel efficiency for the engine of 10.5% over the OICA cycle, and 8.2% over a road cycle was possible. The net increase in fuel efficiency would be 5% when coupled to a CVT and operated over simulated highway conditions. In Phase II an economic analysis was performed on the engine with turbocompound (TC) and a Continuously Variable Transmission (CVT). The system was analyzed to determine the payback time needed for the added cost of the TC and CVT system. The analysis was performed by considering two different production scenarios of 10,000 and 60,000 units annually. The cost estimate includes the turbocharger, the turbocompound unit, the interstage duct diffuser and installation details, the modifications necessary on the engine and the CVT. Even with the cheapest fuel and the lowest improvement, the pay back time is only slightly more than 12 months. A gear train is necessary between the engine crankshaft and turbocompound unit. This is considered to be relatively straight forward with no design problems.