According to the Parallel Hybrid Electric Vehicle (PHEV) demands on powertrain systems, the dynamic models of PHEV are built in this paper. Base on the analysis of dynamical characteristics of both internal combustion engine (ICE) and electric machine (EM), the dynamic ability and fuel economy performance of PHEV is presented. The paper focuses on the parametric design of powertrain on vehicle performance, which provided the theoretical foundation for PHEV design. The paper also puts forward the control strategy of PHEV during the operating modes switching, which aims to solve the problem of the power distribution between the ICE and electric motor, which can effectively resolve process control problems of the complex PHEV system. By employing the dynamic model and performing MATLAB simulation, the results of simulation are given, which demonstrate that the PHEV improve performance well.