The integrated starter generator replaces the conventional starter and alternator with one electrical machine handling both functions. Start/Stop functionality, vehicle launch assistance, and higher speed transient power supplementing enhance the vehicle performance at the lower fuel consumption rate. This functionality requires the electrical machine to provide high starting and launch assistant torque in motoring mode and relatively high power capability over the wide speed range for battery charging. The overall cost of the system is the underlining concern and crucial part of the design optimization. This paper focuses on advantages of induction machines (IMs) in automotive industry and an approach to design a cost-effective electrical machine for belted starter-alternator applications. Design optimization of the IM is described to achieve desired performance, including rotor bar count, solid conductor (bar winding) versus stranded winding design, rotor bar shape optimization, and finally performance maps for the electrical machine, including both predicted and measured results. A thermal study of the machine is also presented, as well as the noise, vibration, and harshness (NVH) consideration in the design selection.