Abstract Technology advancement for on-road vehicles has gained significant momentum in the past decades, particularly in the field of vehicle automation and powertrain electrification. The optimization of powertrain controls for autonomous vehicles typically involves a separated consideration of the vehicle's external dynamics and powertrain dynamics, with one key aspect often overlooked. This aspect, known as flexible power demand, recognizes that the powertrain control system does not necessarily have to precisely match the power requested by the vehicle motion controller at all times. Leveraging this feature can lead to control designs achieving improved fuel economy by adding an extra degree of freedom to the powertrain control while maintaining safety and drive comfort. The present research investigates the use of an Approximate Dynamic Programming (ADP) approach to develop a powertrain controller, which takes into account the flexibility in power demand within the ADP framework. The concept of reachable sets is incorporated into the ADP framework to ensure safety, improve ride comfort, and enhance the accuracy of the optimization solution. The formulation is based on an autonomous hybrid electric vehicle (HEV), while the methodology can also be applied to other types of vehicles. It is also found that necessary customization of the ADP algorithm is needed for this particular control problem to prevent convergence issues. Finally, a case study is presented to evaluate the effectiveness of flexible power demand, as addressed by the ADP method. The experiment demonstrates a 14.1% improvement in fuel economy compared to a scenario without flexible power demand.