The hybrid system comprised by a proton exchange membrane (PEM) fuel cell and internal combustion engine shows many advantages for vehicle applications. The hybrid system can recover the un-reacted hydrogen from fuel cell, utilize heat in the combustion product from cylinder, or combine the advantages of both. Based on thermodynamics and electrochemistry, an indirect integration system of the PEM fuel cell and Otto cycle is established for vehicle applications. The irreversibilities such as the entropy production and overpotentials in the fuel cell, the finite-rate heat transfer between the air in the Otto cycle and combustion chamber wall, the irreversible compression, expansion, and regeneration processes in the Otto cycle are considered. The excellence of the PEM fuel cell compared with internal combustion engine is shown in terms of energy conversion efficiency. When the vehicle is speeding or launching suddenly, not only the flow rate of natural gas into the hybrid system should be increased but also a specific coupling mode between two powertrain systems should be found. Copyright (c) 2015 John Wiley & Sons, Ltd.