Strict regulations exist in different countries with respect to vehicular emissions by their respective government bodies requiring automakers to design fuel-efficient vehicles. Fuel economy and carbon emission are the main factors affecting these regulations. In this competitive industry to make fuel efficient vehicles and reduce Green House Gas (GHG) emissions in internal combustions has led to various developments. Exhaust Heat Recovery System (EHRS) plays a vital role in improving powertrain efficiency. In this system, heat rejected by the engine is reused to heat the vehicle fluids faster (for example, engine coolant, engine oil, etc.) correspondingly reducing harmful gas emissions. In internal combustion engines, generally only 25% of the fuel energy is converted into useful power output and approximately 40% of it is lost in exhaust heat. Certain studies show that by using the EHRS, the power output can be increased to 40% and the heat loss can be reduced to as much as 25%. The purpose of this study is to make use of this lost energy and convert most of it into useful energy. The thermodynamic properties and fuel consumed during the warmup period were analyzed to measure the improvement in the engine efficiency. The design was implemented on a Briggs and Stratton Junior 206cc engine. This system includes the use of heat exchangers. The main goal of this study is to develop a robust EHRS design and compare it with the baseline engine configuration to see the thermal and fuel economy improvement during warm up.