This thesis presents the stability analysis of an Electric Road System (ERS), which is often abbreviated as eHighway, used for the electrification of the hybrid vehicle. The overall system modelling of the ERS, starting from the sub-station to the critical part of the Scania hybrid truck is performed in the MATLAB Simulink environment. The ERS consists of an overhead catenary line (OCL), where vehicles are electrified by using a pantograph mounted over the vehicle. The stability analysis of the power supply of the overhead line is done by taking into account several aspects of the system. The simulation results are validated with the real test track measurements and the deviations are shown. The frequency response of the system is considered to measure the stability margin. The resonance conditions are clarified and essential variable choke is proposed to damp them out. Also the harmonic components injected from the vehicle side, that are in the closer range of the resonance, are figured out and filtered. When multiple vehicles are electrified from the same catenary line, then there are interferences in between the vehicles. These disturbances both to the vehicles and the overhead power supply system are presented in the time domain. Finally, the results are shown to demonstrate the effectiveness of the variable choke to increase the stability margin in the overhead supply system. In the frequency domain results, it has shown that the resonance is shifted out of the system operating frequency. In the time domain results, it has shown that the high amplitude of the current and voltage signals are sufficiently damped out by variable choke implementation.