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Internal combustion engine is still expected to be the major power unit to propel vehicles for decades from now on. However, for normal driving conditions, more than half of the consumed fuel energy of engine is wasted, in the form of exhaust heat and coolant heat. In order to recover the waste heat generated in the thermodynamic cycle of internal combustion engine, a novel hybrid pneumatic engine concept is proposed. After combustion process, additional compressed air is injected into the cylinder to absorb the heat released by the fuel, and the expansion process of compressed air is optimized. The model of the hybrid pneumatic engine cycle is established and explored in GT-POWER, and it is then used to analyze the influences of the main design parameters on the cycle dynamic and economic performance. The preliminary simulation results show that engine power and economic performance is mainly related to the compressed air supply, the fuel mass and the engine speed.