ABSTRACT This paper explores the topics of innovation dynamics and investment choices that exist in subsystem design architectures of complex product developments. A particular theme in the innovation literature is captured and extended. This refers to the process of knowledge development regarding technology intersections within product developments that can sustain product innovation. This is fulfilled in this research through a composition of analytical tools that are used to match the case study environment. In this regard a unique variety of modeling techniques are sequenced to complement the problems encountered and support the outcome of technical and economic decision criteria. The case study presented here is at the forefront of economic and environmental concern - the evolution of Hybrid ElectricVehicles, HEV, efficiency. This paper outlines an innovative and analytical decision approach that is at the core of HEV evolution.