Actually mounting an engine inside a wheel increases "unsprung weight" which is bad for handling. But putting such small engines near the wheels (but still on t

Actually mounting an engine inside a wheel increases "unsprung weight" which is bad for handling. But putting such small engines near the wheels (but still on the body so the suspension can do its job) that could indeed improve cargo space. Pushing the engine weight outward toward the wheels would also make the vehicle harder to rotate, which is bad for track cars and go carts, but good for passenger and freight vehicles.