Electrification of vehicular systems has gained increased momentum in recent years with particular attention to constant power loads (CPLs). Since a CPL potentially threatens system stability, stability analysis of hybrid electric vehicle with CPLs becomes necessary. A new power buffer configuration with battery is introduced to mitigate the effect of instability caused by CPLs. Model predictive control (MPC) is applied to regulate the power buffer to decouple source and load dynamics. Moreover, MPC provides an optimal tradeoff between modification of load impedance, variation of dc-link voltage and battery current ripples. This is particularly important during transients or starting of system faults, since battery response is not very fast. Optimal tradeoff becomes even more significant when considering low-cost power buffer without battery. This paper analyzes system models for both voltage swell and voltage dip faults. Furthermore, a dual mode MPC algorithm is implemented in real time offering improved stability. A comprehensive set of experimental results is included to verify the efficacy of the proposed power buffer.