This paper presents a comprehensive study on the application and optimization of automotive thermoelectric generators (ATEGs), focusing on the crucial role of heat exchangers in enhancing energy conversion efficiency. Recognizing the substantial waste of thermal energy in internal combustion engines, our research delves into the potential of TEGs to convert engine waste heat into electrical energy, thereby improving fuel efficiency and reducing environmental impact. We meticulously analyze various heat exchanger designs, assessing their influence on the TEG’s output power under different exhaust gas flow rates and temperatures. Furthermore, we explore the impact of TEG material properties on the overall energy conversion effectiveness. Our findings reveal that specific heat exchanger designs significantly enhance the efficiency of waste gas heat exchange, leading to an improved performance of the TEG system. We also highlight the importance of thermal insulation in maximizing TEG output. This study not only contributes to the ongoing efforts to develop more sustainable and efficient vehicles but also provides valuable insights into the practical application of thermoelectric technology in automotive engineering. Through this research, we aim to pave the way for more environmentally friendly transportation solutions, aligning with global efforts to reduce fossil fuel dependence and mitigate environmental pollution.