Per Automobile Magazine:
The 332-hp, 6.0-liter V-8 underhood, however, is identical to those used in GM’s other full-size hybrid trucks. So too is the 2-mode hybrid transmission, which switches between an infinitely variable mixture of gasoline and electric power to fixed gearing when needed. GM says the system allows the Yukon Denali Hybrid to achieve 21/22 mpg city/highway with rear-wheel-drive.