They’re not. We hit up to 55% efficiency on our slow speed diesels.
To start, heat is what’s going much of the work. You’re heating up gasses, which forces them to try to expand in a limited space, creating pressure.
Ideally you’d want to NOT cool the engine. If the cylinder walls were the same temp as the combustion gasses, you’d have no heat lost into the walls and it would basically all go into expanding the gasses therefore into driving the piston. However, that’s not realistic with modern materials. There has been some research into ceramic engine blocks though.
Car engines are also tiny, you have a lot of surface area for a small combustion volume. Lots of surface area, plus having to cool that surface area, means lots of heat energy lost.
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