System and method for the combination of a flywheel and motor/generator inside a wheel hub for hybrid vehicle propulsion. The flywheel and motor/generator are connected by a planetary gear system, in which a first port is connected to the flywheel, a second port is connected to the wheel hub, and a third port is connected to a motor/generator. An additional motor/generator may be used at one of the first port and second port. The system may be used in an electric-kinetic hybrid mode, or in a fuel-kinetic hybrid mode, when used in a vehicle having an internal combustion engine as the prime mover. Efficiency of energy storage and release is significantly improved in comparison to prior art.