It's not so much that ICE engines are inefficient, it is all heat engines of any type are bounded in by the same thermal limitations (ICE, gas turbine, steam tu

It's not so much that ICE engines are inefficient, it is all heat engines of any type are bounded in by the same thermal limitations (ICE, gas turbine, steam turbine, other externally heated piston engines, etc). In the physics of heat engines, there is the Carnot efficiency that is based only on the temperature of the hot source (combustion chamber in an ICE), and the cold sink (atmospheric air). Relative to this limit on all heat engines, modern ICE engines are very efficient at their peak efficiency point. A problem specific to ICE in a vehicle application is that at the engines end up running in conditions away from their peak efficiency point due to vehicle load, terrain and traffic conditions. That is where hybrids are supposed to pick up their efficiency by letting the ICE turn off completely in the regimes that force the engine to run at low efficiency points. Such as idling where the MPG is zero.