This paper proposes a new power management strategy based on pq-Theory for fuel cell and electric vehicle applications. Using a modular cascaded converter topology, more than one power source could be combined with capacitors to supply active and reactive power in an efficient manner to the electric motor. The control strategy to separate mean and oscillating active power and reactive power, as well as capacitors' voltage regulation control, are described. Simulation results are shown to validate the control strategy. Experimental results using a minimal topology prototype and static load show the practical application of the control.