A technical method of recovering exhaust heat in internal combustion engine (ICE) is the thermoelectric generator (TEG), which contributes to efficiency improvement. In this study, a two-stage thermoelectric model is built using the exhaust gas of ICE as heat source. After comparing the single- and two-stage TEG, we select the latter to be optimized by analyzing the effect of relevant factors. The results show that the absorbed heat, output power, and conversion efficiency increase significantly with increasing heat transfer coefficient up to the value of 400 W m(-2) K-1. The effect of heat source temperature is greater than that of the cold source. Meanwhile, both output power and absorbed heat increase with increments of the total number of thermocouples, whereas conversion efficiency decreases. Finally, output power and conversion efficiency exhibit a peak value with the variation of the thermocouple ratio. The two-stage TEG achieves maximum output power when the ratio is between 0.8 and 0.9. (C) 2014 Elsevier Ltd. All rights reserved.