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This Small Business Innovative Research (SBIR) Phase I project deals with the need for improved angle encoders or resolvers for advanced automotive powertrains. The performance of powertrains for electric vehicles (EV's) and hybrid electrical vehicles (HEV's) as well as for such concepts now being envisioned as a camless engine will require drive shaft angle encoders with higher resolution and faster response. This proposal addresses these needs in the form of an optical encoder based on an old concept, but used in an innovative fashion and executed with component technologies, both optical and electronic, that have recently become available. The design, in addition to its high performance is extremely robust, in terms of temperature, alignment and in its tolerance to high levels of electro magnetic interference (EMI). Also, and essential for the automotive industry, that performance is achieved with the reliability and low cost demanded by that industry. Angle encoding is basic to rotary drive systems. It is required for commutation and phase angle adjustment to affect the control of energy flow. Angle encoders are also essential to optical and radar scanning mechanisms