The intermediate fluid thermoelectric generator (IFTEG) represents a novel approach to power generation, predicated upon the principles of gravity heat pipe technology. Its key advantages include high-power output and a compact module area. The generator’s performance, however, is influenced by the variable exhaust parameters typical of automobile operation, which presents a significant challenge in the design process. The present study establishes a mathematical model to optimize the design of the IFTEG. Our findings suggest that the optimal module area sees substantial growth with an increase in both the exhaust heat exchanger area and the exhaust flow rate. Interestingly, the optimal module area appears to demonstrate a low sensitivity to changes in exhaust temperature. To address the challenge of determining the optimal module area, this study introduces the concept of peak power deviation. This method posits that any deviation from the optimal module area results in an equivalent power deviation. For instance, with an exhaust heat exchanger area of 1.6 m2, the minimum peak power deviation is 27.5%, corresponding to a design module area of 0.124 m2. As such, the actual output power’s deviation from the maximum achievable output power will not exceed 27.5% for any given set of exhaust parameters. This study extends its findings to delineate the relationship between the optimal design module area and the exhaust heat exchanger area. These insights could serve as a useful guide for the design of future power generators.