Regenerative braking is the process by which a vehicle's kinetic energy can be retained while decelerating. As discussed in our efficiency obstacles article, every time a conventional car brakes, friction converts the vehicle's kinetic energy into heat. That heat is useless to the car, the driver, and the road, and becomes lost energy.
All hybrid gasoline-electric cars have generators and batteries. Generators take kinetic energy and convert it into DC electric energy. That electricity runs through an inverter where it is turned into AC power which is then voltage regulated and converted back to DC so it can be stored in the car's high voltage battery pack.
Regenerative braking does exactly that: it takes the car's kinetic energy and converts it into electrical energy.
The physical application of the generator to the car wheels slows the car down. Although effective on their own, a regenerative brake must be combined with a conventional friction brake to ensure proper deceleration for different driving situations, like stopping short.
Regenerative braking technology can recover about 30% of the energy ordinarily lost to braking in conventional vehicles. The electric energy created from regenerative braking accounts for a full 20% of the energy used by the Toyota Prius according to a US Department of Energy study.
While all conventional vehicles have batteries that store electricity to power accessories like headlights, and have kinetic energy as a result of moving forward, only hybrid cars can use regenerative braking to increase fuel efficiency. That's because conventional vehicles have no method of converting electricity into kinetic energy. Hybrid cars have an electric motor.