Use '$\bar{e}$' and specify 'Interpreter','latex' to get —
![](https://www.mathworks.com/matlabcentral/answers/uploaded_files/711812/image.png)
so:
xlabel('$\bar{e}$', 'Interpreter','latex')
This works in MATLAB and I assume it would also work in Simulink, although I have not tried it in Simulink.
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