Restrictive exhaust directly hurts ICE efficiency. Thats bs about a 5lb electric motor. you can get about 3hp out of a 5lb motor. Additionally, a electric drivetrain (including the battery) weighs more then a ice drive train (including a full fuel tank).Engine efficiency is not really hurt by current regulation. Honestly using an ICE to actually power a drivetrain is a really awful idea. Transmissions are horrible. What you can do with a 500lb engine I can do with a 5lb electric motor full stop all day long. Heck STEAM is more efficient AND more powerful.
The question you should be asking is: If EVs need novel materials that may never happen and gasoline has very limited room to grow.... why don't we just change the fuel so ICEs can continue to get smaller, lighter, and more efficient at their jobs?
Sometimes people get so obsessed with the new that they forget the older technology is far easier to improve if you just change one variable.
Have any suggestions for a fuel that can be produced in the quantities used by automobiles? It also has to be relatively stable. compressed gasses are a pain. Currently we commonly use:
Gas, Diesel, Compressed natural gas, Propane