Dynamic and electric parameters of HEVs and EVs such as acceleration, regenerative braking and battery charging/discharging depend on the battery system performance. Excessive or uneven temperature rise in a module or pack of battery reduces the life cycle significantly. Therefore, improving the battery thermal management system (BTMS) is very important for reliability and cost of vehicle. The objective of this paper is to design an air cooled battery thermal management system using thermoelectric to maintains the temperature of battery in appropriate range at stressful and abuse conditions. An air flow with fans, heat sinks, fins and thermoelectrics is used for battery thermal management of hybrid electric bus to improve temperature uniformity and reduce maximum cell temperature. A battery pack consists of 12 smaller packs containing 14 porch cells with series design is selected for this study. This Li-ion battery pack specifically designed for the hybrid electric bus produced by Vehicle, Fuel and Environments Research Institute (VFERI). A detailed three-dimensional thermal model of designed battery pack has been developed using the fundamental heat transfer principles and CFD (computational fluid dynamics) analysis tools to predict the temperature distributions in cells and packs. The air flow for the battery thermal management of porch Li-ion cells is numerically analyzed using a three-dimensional CFD model. The numerical results indicate that the temperature of battery maintain below 35 °C while keeping the cell temperature difference below 5 °C during high charge/discharge rates and ambient temperature more than 40 °C. In other studies though using the air as the heat transfer medium for BTMS may be simpler, cheaper and smaller than heat transfer by liquid, but it is not recommended because it is not as effective as heat transfer by liquid. In this paper, a new method is presented that improves air cooling thermal management with help of thermoelectric. It is more effective than usual air cooling thermal management. Thermal modeling of a Li-ion battery air cooling pack suitable for hybrid electric bus using thermoelectric shows that such an approach can keep the cell temperature in the pack below the upper safety limit (35 °C) in high-rate discharge rates and under ambient temperatures higher than 40 °C.