In the mid-1990s, ISE recognized there was a market opportunity for a company that could offer complete hybrid systems to the bus and truck manufacturers, since neither they nor their suppliers were moving in this direction. Ever since ISE began the process of formation in 1994, the Company has been focused almost exclusively on hybrid-electric drive systems for heavy-duty vehicles, with a small amount of closely related work on all-electric drive systems for trams and other specialized applications.

In 1995, shortly after the Company's formation, ISE was awarded a research grant by California's South Coast Air Quality Management District and the Company began developing and testing electric and hybrid-electric vehicle components and vehicles. Since then, ISE has converted or has acquired contracts to convert more than a dozen different types of vehicles to run on electric, hybrid-electric, or fuel cell power, including:

• A fleet of three Nova RTS 40-foot diesel hybrid transit buses for New Jersey Transit.
• A fleet of three New Flyer 40-foot gasoline hybrid transit buses for the City of San Bernardino.
• One mid-sized fuel cell powered hybrid-electric bus, using an El Dorado National 30-foot low floor bus model.
• A fleet of eight El Dorado National 30-foot hybrid-electric transit buses, four using conventional internal combustion engines and four using microturbines for auxiliary power units. Seven of these eight buses use propane fuel and the eighth is a 30-foot gasoline hybrid bus.
• Four 40-foot fuel cell powered hybrid-electric buses, being developed for AC Transit and SunLine Transit under a $10.6 million contract awarded to ISE in April 2002. These buses will be Van Hool 40-foot transit buses.
• Three hybrid-electric tow tractors, using diesel engines for auxiliary power units, for the U.S. military. These vehicles have been demonstrated and used at Air Force and Marine bases in California, Virginia, and Florida.
• An electric airline tow tractor that was placed into service at Los Angeles International Airport by United Airlines in 1998. This vehicle is more powerful, versatile, and reliable than the same model tractor using a conventional diesel drive system.
• An electric beverage delivery truck, delivered to the Sparkletts Water Company in Los Angeles in 1998. To ISE's knowledge, this is the largest and heaviest all-electric truck in operation in the world.
• Two advanced electric trams, which entered service in the Anaheim resort area in the summer 2001. These vehicles are being operated in a high visibility area at the Anaheim Convention Center, across the street from Disneyland.
• Four different Class 8 hybrid-electric truck models, using both diesel and natural gas engines for auxiliary power units. These trucks, all supplied by different major truck manufacturers, are now in various stages of operational testing.

Building on this vehicle integration experience, ISE has now made the transition to a volume supplier of integrated hybrid-electric drive systems, which can be installed into buses by bus and truck manufacturers. ISE also sells individual subsystems and components, including integrated battery and ultracapacitor packs, motive drive subsystems (as well as individual motors and inverters), auxiliary power units, electrically-driven accessories, and hybrid vehicle control systems.