Energy recovery is gaining importance in various transportation and industrial process applications because of rising energy costs and geopolitical uncertainties impacting basic energy supplies. Various advanced thermoelectric (TE) materials have properties that are inherently advantageous for particular TE energy recovery applications. Skutterudites, zero- and one-dimensional quantum-well materials, and thin-film superlattice materials are providing enhanced opportunities for advanced TE energy recovery in transportation and industrial processes. This work demonstrates (1) the potential for advanced thermoelectric systems in vehicle energy recovery and (2) the inherently complex interaction between thermal system performance and thermoelectric device optimization in energy recovery. Potential power generation at specific exhaust temperature levels and for various heat exchanger performance levels is presented showing the current design sensitivities using different TE material sets. Mathematical relationships inherently linking optimum TE design variables and the thermal systems design (i.e., heat exchangers and required mass flow rates) are also investigated and characterized.