A regular brake usually works by pushing a non-moving part (the brake pad) against a moving part (like the wheel). This causes the wheel to slow down because of the friction. What happens physically is that some of the kinetic energy from the wheel moving is turned into heat energy due to that friction, leaving the wheel with less kinetic energy.
A generator is basically an electromagnetic brake, but instead of turning it all into heat energy, most of the energy is turned into electricity instead.
Some vehicles do have something called regenerative braking systems, which brake the vehicle while converting the kinetic energy into electricity. In electric vehicles, this probably most simply done by simply reversing the electric motor so that it converts the motion of the drive train back into electricity (A generator and an electric motor is basically the same thing, just used in opposite ways)
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