Axial flux (AF) motors and generators have been used in niche automotive applications for many years. Given their disk like shape they offer distinct advantages for integration into hybrid powertrains where available length is limited. An overview of axial machine topologies is given and the design and performance laws that govern the sizing of axial flux permanent magnet machines are presented. Based on the analytical laws described it is shown that an axial machine can achieve significantly more torque than a size comparable radial machine. 3D finite element analysis is used to fine-tune designs and to investigate loss mechanisms. A P2 hybrid module case study is used to show the benefits and challenges of the axial topology when compared to the radial one. The cooling system of the machine is presented in order to show how the integration of coolant passages could be achieved. The possibility of introducing heat barriers into a hybrid powertrain, decoupling the hybrid module from the rest of the powertrain, is also presented. The predicted performance of the machine is presented and compared to the initial test results.