In this paper, a novel cost-effective air hybrid powertrain concept for buses and commercial vehicles, Brunel Regenerative Engine Braking Device (RegenEBD) technology, is presented and its performance during the braking process is analysed using the Ricardo WAVE engine simulation programme. RegenEBD is designed to convert kinetic energy into pneumatic energy in the compressed air saved in an air tank. Its operation is achieved by using a production engine braking device and a proprietary intake system design. During the braking operation, the engine switches from the firing mode to the compressor mode by keeping the intake valves from fully closed throughout the four-strokes by installing the Variable Valve Exhaust Brake (VVEB) device on the intake valves. As a result, the induced air could be compressed through the opening gap of intake valves into the air tank through the modified intake system. The compressed air can then be used to drive an air starter to achieve regenerative stop-start operations. The RegenEBD technology has been implemented and demonstrated on a production vehicle with the existing vehicle transmission system by retrofitting the VVEB and adding a sandwich block between the cylinder head and the production intake manifold.A Yuchai 6A six-cylinder 7.25 litre diesel engine used on city buses in China has been modelled as an air hybrid engine and analysed using Ricardo's WAVE engine simulation software. The results show that for a 151 litre air tank, it takes 120 engine revolutions for charging the air tank pressure from 4 bar to 6 bar (4.8 seconds at 1500 rpm engine speed). During stop-start operations, the engine could theoretically be cranked directly by the compressed air through fast acting valves but in this study, it is cranked by means of a standard production air starter motor.In addition, a new air hybrid vehicle driving cycle simulation programme has been developed and applied to analyse the charging and discharging processes during a typical London Bus route. The analysis shows that with the RegenEBD almost all the idling periods can be eliminated through regenerative stop-start operations, resulting a fuel saving of 6.2%. For commercial vehicles, the regenerative compressed air supply can also be used to provide service air in place of the engine driven compressor for additional fuel savings. Furthermore, the compressed air can provide the instant boost for better vehicle performance and further fuel savings.