Low rpm means that an engine can burn less fuel per second, which results in less power (for a given displacement (size)). So operating an engine at low rpm means you need a big, heavy engine which is fine for a ship but annoying for a car.
At very high rpm the amount of time for the fuel to burn in the cylinder actually starts to become a problem. You can think of the flame expanding outwards from the sparkplug. If you don’t burn all the fuel before the piston has moved down and the exhaust valve opened then you are wasting fuel and so lose efficiency. You also need very high flow rates of air through your valves which leads to drag and so a loss of efficiency. Formula 1 engines that operate at high rpm are very clever and quite different from production vehicle engines. And of course high engine speeds mean higher accelerations and so forces on the components, coupled with increased temperatures, leading to reduced life.
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