The invention provides a vehicle propulsion system having an energy storage system and an optimized method of controlling operation thereof. A control system for controlling the supply of power from an energy storage system to a DC bus of a vehicle propulsion system is disclosed herein. The control system includes a controller programmed to monitor real-time operating parameters of a plurality of energy storage units of the energy storage system, access degradation models for the plurality of energy storage units, and optimize usage of the plurality of energy storage units during real-time operation of the vehicle propulsion system based on the degradation models.