Expanding gas from combustion moves a piston up which then translates to the car moving.
Imagine the piston as a cube, and only one side is able to move when the gas expands. The gas interacts with every wall but only one moves, so only 1/6 (0.17) of the interactions results in motion, the rest result in heat. You can improve the efficiency by changing the pistons dimensions, but you are inherently limited by needing to contain the expanding gas.
The waste heat can be used to warm the car’s interior, and a catalytic converter needs the waste heat to reach its operating temperature.
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