Actually, going from 96-98% to 99% is still huge. Assume the lower efficiency motor is 100W. You waste 2-4. Presumably you can dissipate that amount of heat.

Actually, going from 96-98% to 99% is still huge. Assume the lower efficiency motor is 100W. You waste 2-4. Presumably you can dissipate that amount of heat. Now, the same form factor can do 200-400W and be ok. So it doesn't change the efficiency of the system (we still use a bunch of wh) but it dramatically changes the form factor of the motor!