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The fuel economy of a vehicle can be improved by recuperating the kinetic energy when the vehicle is decelerated. However, if there is no electrical traction component, the recuperated energy can be used only by the other electrical systems of the vehicle. Thus, the fuel economy improvement can be maximized by balancing the recuperated energy and the consumed energy. Also, suitable alternator and battery management is required to maximize the fuel economy. This paper describes a design optimization process of the alternator and battery system equipped with recuperation control algorithms for a mid-sized sedan based on the fuel economy and system cost. A vehicle model using AVL Cruise is developed for cycle simulations and validated with experimental data. The validated model is used for the parametric study and design optimization of the alternator and battery systems with single and dual energy storage.