The rising use of vehicles and herewith the yearly decrease in available amount of crude oil left on the earth accompanied by a continuously increasing price puts high stress on the vehicle industry. Furthermore, Humans face a growing increase in the global environmental pollution concerns and tough emission standards constrain the maximum amount of vehicles emission to reduce air pollution. All of these factors force automobile and vehicle manufactures into never-ending effort to satisfy these requirements. Hence, the development of new vehicles to further reduce fuel consumption and emission is a mandatory.The high power density of hydraulic pumps/motors and hydro-pneumatic accumulators make hydraulic technology look promising for vehicles' transmission and its integration in the automobile industry should be considered. Furthermore, a reasonable price, reliability and long life time of hydraulic units are good enough and required for this purpose. The recently developed hydrostatic units, that meet the increased requirements of high efficiency over a wide range of operation offer, new capability for hydrostatic drivelines in vehicle applications.This thesis primarily addresses the potential of hydraulic transmission for use in automobiles. The analysis and simulations assume baseline vehicle specifications and components of a mid-sized passenger car. Three hydraulic drivetrain configurations were investigated. A continuously variable hydrostatic transmission integrated with an engine controlled to operate on the ideal fuel efficiency line is first introduced. Then, a secondary controlled hydrostatic transmission equipped with conventional hydrostatic units and an energy recovering system working under engine on/off control strategy is also investigated.