The free piston energy converter (FPEC) is a new type of power unit for hybrid electric vehicle. In a FPEC, an internal combustion engine driven permanent magnet linear generator (PMLG) may be utilized to produce electrical energy. This paper discusses the issues that are pertinent to the design of a linear permanent magnet generator for application in a FPEC. To achieve the required high power density and low moving mass, a tubular machine equipped with modular windings and axially magnetized is considered to be the most appropriate. Finite Element Analysis are adopted to analyse the PMLG. Magnetic field distribution, EMF, thrust force and Noload corl loss are obtained through the finite element method. An effective tool for design optimization is provided. It is shown that the machine design can be optimized with respect to three key dimensional ratios while satisfying other performance specifications.