Abstract For hybrid electric vehicles, working mode division and shift schedule are two decisive factors affecting vehicle fuel economy. This paper introduces a method for vehicle working mode division and shift schedule determination on the basis of optimal system efficiency. The key index named ‘fuel-electricity conversion efficiency’ is defined and calculated. Via this method, unreasonable gear modes in specific working modes are excluded and the mode transition map and upshifting curves in each working mode are extracted. The simulation results demonstrate that, with the application of the single-motor multi-mode parallel hybrid power system, the proposed mode transition and shifting strategy can increase vehicle fuel economy by 12.99%.