Thermoelectric generator (TEG) is a promising energy-converting device that produces electricity from the temperature difference between a heat source and a heat sink. Enhancing the heat transfer between the TEG and the heat source or heat sink can improve the TEG performance. This study proposes a novel automobile exhaust TEG. The novelty originates from the fact that the proposed TEG uses magnetized Ferro-fluid flow as coolant to enhance cooling rate. Computational fluid dynamics (CFD) approach, through C++ coding in the OpenFOAM open-source software package, is used to assess the system’s performance. The results indicate that employing the magnetized Ferro-fluid flow can favorably reduce the cold side temperature of the TEG module, leading to a 5.5 % voltage rise. It is also shown that to achieve the same voltage enhancement without the use of the proposed magnetized Ferro-fluid flow, a tough task of a 470 % rise in the cold side mass flow rate is required. A parametric study reveals that the effectiveness of using the magnetized Ferro-fluid flow decreases with the exhaust temperature but is almost independent of the exhaust mass flow rate. This study also introduces the best location for the magnetic sources.