A method for operating a hybrid electric vehicle, comprising: converting direct current power received from a DC power storage device into alternating current real power and AC reactive power with a power inverter; operating an electric machine in a motoring operating mode with the AC real power to produce torque that is used to start an engine; characterized in that after the engine is started, if the speed of the motor shaft reaches or exceeds a preset speed within a preset tolerance controlling the inverter to change the operating mode for the electric machine from the motoring operating mode to a free spinning operating mode by decaying the output current supplied by the DC/AC power inverter to the electric machine to zero, controlling the engine to take over the speed control and to regulate the rotational speed, when the motor's shaft speed of the electric machine reaches a threshold value higher than the preset speed controlling the power inverter such that the electric machine is operable in a generating mode wherein the electric machine receives at least AC reactive power from DC power received from the DC power storage device and controlling the power inverter such that DC power received from the DC power storage device is converted into AC current having a torque current component equal to zero, within a first preset tolerance, and having a magnetizing current component equal to a reference current value of the electric machine, within a second preset tolerance, controlling the power inverter to enable its internal voltage regulator to regulate the magnetizing current level so that the generation system's voltage is made equal to a preset value, and after the output voltage of the electric machine is at a preset voltage value and after an AC frequency of the output voltage of the electric machine is at a preset frequency value, operating the electric machine as a generator to generate AC power and operating a switch/power conditioning module to provide the generated AC power to a load. converting direct current power received from a DC power storage device into alternating current real power and AC reactive power with a power inverter; operating an electric machine in a motoring operating mode with the AC real power to produce torque that is used to start an engine; characterized in that after the engine is started, if the speed of the motor shaft reaches or exceeds a preset speed within a preset tolerance controlling the inverter to change the operating mode for the electric machine from the motoring operating mode to a free spinning operating mode by decaying the output current supplied by the DC/AC power inverter to the electric machine to zero, controlling the engine to take over the speed control and to regulate the rotational speed, when the motor's shaft speed of the electric machine reaches a threshold value higher than the preset speed controlling the power inverter such that the electric machine is operable in a generating mode wherein the electric machine receives at least AC reactive power from DC power received from the DC power storage device and controlling the power inverter such that DC power received from the DC power storage device is converted into AC current having a torque current component equal to zero, within a first preset tolerance, and having a magnetizing current component equal to a reference current value of the electric machine, within a second preset tolerance, controlling the power inverter to enable its internal voltage regulator to regulate the magnetizing current level so that the generation system's voltage is made equal to a preset value, and after the output voltage of the electric machine is at a preset voltage value and after an AC frequency of the output voltage of the electric machine is at a preset frequency value, operating the electric machine as a generator to generate AC power and operating a switch/power conditioning module to provide the generated AC power to a load.