An in‐depth analysis and comparison between the virtual space vector pulse width modulation (VSVPWM) method and the space vector pulse width modulation (SVPWM) method is presented in this paper. Compared to SVPWM, VSVPWM can achieve the balance of the neutral‐point voltage for any load over the full range of the inverter output voltage and for all load power factors. Nevertheless, VSVPWM would cause higher dv/dt of output voltages, higher voltage total harmonic distortion, and slower voltage‐balancing dynamic. A detailed analysis on these drawbacks is given. Then, the relationship between the neutral‐point current and the factor k0, which is employed to adjust the ratio of time of application of small vectors in a pair, is studied comprehensively, and a modified zero‐sequence voltage injection method for the two‐level inverter is introduced into the small hexagons of the three‐level space vector diagram. A simplified hybrid carrier‐based pulse width modulation (PWM) method is developed. Compared to VSVPWM, the proposed PWM method is not only easy to implement voltage‐balancing control but also reduces the switching frequencies of the devices and achieves better output voltage spectra and faster voltage‐balancing dynamic. All these benefits of the proposed method are verified through experimentation. © 2018 Institute of Electrical Engineers of Japan. Published by John Wiley & Sons, Inc.