Heat recovery from vehicle exhaust is a promising application of thermoelectric power generation (TEG). In our previous study, a single stage TEG with 4.04% system thermal efficiency has been tested. To improve the power output and the efficiency, a novel prototype two-stage TEG employing heat pipe from vehicle exhaust has been proposed. After system model being established, an experimental set up has also been built and tested for further study. Results of both theoretic analysis and experimental results show the viability of the prototype TEG for exhaust heat recovery. The prototype can gener-ate a maximum power of about 250W when the hot side operates at 473K. The system thermal efficiency reaches 5.37%; it is improved by 32% comparing to single stage TEGs 4.04% in the same operating conditions. Finally, system optimization and future improvement of the prototype are discussed.