The promise of thermo-electric (TE) technology in vehicles is a low maintenance solid state device for power generation. The Thermo-Electric Generator (TEG) will be located in the exhaust system and will make use of an energy flow between the warmer exhaust gas and the external environment. The potential to make use of an otherwise wasted flow of energy means that the overall system efficiency can be improved substantially. One of the barriers to a successful application of the technology is the device efficiency. The TE properties of even the most advanced materials are still not sufficient for a practical, cost effective device. However the rate of development is such that practical devices are likely to be available within the next fifteen years. In a previous paper [ 1 ], the potential for such a device was shown through an integrated vehicle simulation and TEG model. It was concluded that with current materials and construction technology a device could be produced to replace the alternator of a super-mini type passenger car (typified by the Ford of Europe Fiesta). Further modeling of TEGs and a supporting experimental program has been used to validate the heat transfer model and the performance of the TEG. Several passenger vehicles were modeled, predicting a fuel saving of 3.9 - 4.7%. TEGs for passenger buses will become a viable alternative to alternators with a payback period of less than three years, once modules with a figure-of-merit ( ZT ) of 3 and a unit cost half of those used in the analysis. A transit bus was modeled and tested on several drive cycles. The results suggested that for a fuel saving of 7.4% with a payback of 6 years could be achieved with current TE materials and costs. Note: Abbreviations and symbols are defined in the appendix .