Typically, when brake pressure is applied to the wheels, it slows down the vehicle through friction. This friction obviously produces heat, which dissipates into the atmosphere. However, in many modern contexts, this conventional form of braking cannot be considered efficient.
Why is that? Well, that’s because all the kinetic energy which is being sucked out of a moving vehicle to slow it down is being wasted as unused heat energy from the friction, when it could as easily be recovered and reused for some other purpose.
As such, regenerative breaking takes into account all such mechanisms which inhibit the speed of the vehicle, while converting its kinetic energy into some form that can be either used right away or stored for later purpose.
So, one way that this can pan out is by converting the kinetic energy into electrical energy, by throwing an electric generator sub-system into the mix. So, if a car were moving down an inclined surface, and a regenerative braking system were controlling its speed of descent, then the constant electric energy being generated this way could go into powering other electrical systems in the car.
When you take the example of a hybrid vehicle, where both conventional fuel and electricity is used in tandem to power it, the above strategy helps save fuel and therefore adds to overall fuel efficiency of the vehicle.
When one considers a fully electric car, the kinetic energy during braking is converted into chemical energy that’s fed into batteries and stored to power the vehicle. Thus, the whole process helps increase the overall range of the electric car that it can accomplish when charged once.