The efficientcy of your ICE is about a measured 30% or less from memory. This number was increased during WW2 when oil be came expensive (well for that day and age) and then the ideas started to flow. One of the most common ideas was partial steam engines, IE water injection. By injecting water into the piston SOME of the heat energy is converted to steam, this created extra pressure and cooled on the exhaust side meaning less fuel could be used for the same abount of torque. This had its downfalls, not having a ready supply of SS parts there was a lot of corrosion of parts (especially on the exhaust valves from memory) this also made the engine's prone to hydrolock if not managed correctly.
There have been a lot of implemented idea's to increase the efficientcy of the ICE, but the issue is more in the design of it rather than anything else. There is a lot of moving and interacting pieces that must perform at high speeds. This generates massive amounts of friction and heat, robbing efficientcy from the engine 2 fold. This while not being the best design is one of the most reliable. With the use of "improvements" and lubracants the flaws in the design have been bought down into a managable level for the common person to handle with some basic maitenance.
A very brief overview of the ICE and it effecientcy. But the real kicker is yet to come.
The common conspiracy theory about big oil contracts with automobile companies are only half true. The contracts that are in place is that they design vehicles to run on a fuel with "x" properties. That is all they do. Its not a controlling contract or anything like that its more of both the companies have come to an agreement, we ensure that a product with these properties is available and in return we supply the consumer with a product they want to buy that uses this product. The efficientcy of the motor viehicle engine is our fault. We have dictated where the market goes, name one time where picking a car was based on mileage over how fast it goes, it only ever happens when the price of fuel goes us. Now this still doesn't swing our favour much when it comes to more efficient cars. Just so you can fully understand, changes to a devise sold on a market need years of testing, stages of production, monitored and documented accounts, expectations and predictions of the performance under a plethora of conditions it will more than likely never see. These must be monitored and then marketed. If there is a definate swing in the market for this modifacation then companies will invest more money into like additions and improvements.
The Hybrid technology we see now is a synergy of a performance idea that was going to be bought to the market for the top end racing fans. The tests and the stages of required assurance were complete then the idea was shoved sideways and altered to fill an emerging market. This, even with its almost doubled fuel mileage did not fair as well as predicted. Instead the slight improvments to 4 wheel drives fuel economies was also noted and this is where most of the market went. People who used to drive medium sized 6 cyl family cars with a fuel economy of 7-8 km/l now drive 4WD with a fuel economy of 6-8km/l and feel better because they feel safer in a larger car. They traded their feelings of damaging the planet for feeling safer.
Whats the point of this ramble, mechanics and engine designers the world over can make ICE's now with efficienties of 50-70%, we as the public will never see them implemented due to the cost of red tape required to have them on the market. There is simply no solid grounding for this type of car to be sold on. As a whole we (yes i said we as in consumers with money) will not shell out the money for a new car that is more fuel efficient over one that is faster more powerful or is larger. The reason for this is the new car market is people with money, and the people in this market want a status symbol.
There is no point in blaming big oil or the car companies, name one company that makes sense of investing money into ideas no one wants? asside from telemarketers, who still make money BTW, there is none.