The use of electromagnetic dampers (ED) in vehicle active suspension systems has drawn considerable attention in the past few years, attributed to the fact that active suspension systems have shown superior performance in improving ride comfort and road handling of terrain vehicles, compared with their passive and semi-active counterparts. Although demonstrating superb performance, active suspensions still have some shortcomings that must be overcome. They have high energy consumption, weight, and cost and are not fail-safe in case of a power breakdown. The novel hybrid ED, which is proposed in this paper, is a potential solution to the above-mentioned drawbacks of conventional active suspension systems. The proposed hybrid ED is designed to inherit the high-performance characteristics of an active ED with the reliability of a passive damper in a single package. The eddy current damping effect is utilised as a source of the passive damping. First, a prototype ED is designed and fabricated. The prototype ED is then utilised to experimentally establish the design requirements for a real-size active ED. This is accomplished by comparing its vibration isolation performance in a 1-DOF quarter-car test rig with that of a same-class semi-active damper. Then, after a real-size active ED is designed, the concept of hybrid damper is introduced to the damper design to address the drawbacks of the active ED. Finally, the finite-element method is used to accurately model and analyse the designed hybrid damper. It is demonstrated that by introducing the eddy current damping effect to the active part, a passive damping of approximately 1570 Ns/m is achieved. This amount of passive damping guarantees that the damper is fail-safe and reduces the power consumption more than 70%, compared with an active ED in an automotive active suspension system.