I have heard a gasoline Internal Combustion Engine (ICE) is only about 20% effecient in it's ability to convert the fuel into forward motion. This is not including the loss of energy in the drivetrain, just the engine itself. A diesel engine is 30% to 35% effecient. The rest of the energy is lost as heat.
In comparison an electric motor is over 90% effecient in it's usage of it's fuel, being electricity.
Regarding the drivetrain loss of energy I found this article on TireRack interesting. Although there is room for improvement in the drive train, the biggest room for improvement is in how the ICE converts fuel to forward motion.
Rolling Resistance:
"In the United States, vehicle manufacturers are required to maintain an average fuel economy for the "fleet" of new vehicles they sell each year. Currently, the government Corporate Average Fuel Economy (CAFE) mandate is 27.5 miles per gallon (mpg) for cars and 20.7 mpg for light trucks (includes minivans, vans, and most pickup trucks and Sport Utility Vehicles). However because it's an "average" fuel economy, in order to sell large cars or trucks (that use more fuel), the vehicle manufacturer must also sell small cars and trucks (that are fuel efficient). The vehicle manufacturer can be fined if their annual vehicle "fleet" uses too much fuel, and can earn "credits" towards future years if their fleet's average fuel economy is better than the government mandated level.
A tire's rolling resistance does affect fuel economy. For that matter, CAFE is so important to most vehicle manufacturers that they demand their suppliers develop low rolling resistance tires to be used as Original Equipment on their new vehicles. In order to meet these demands, these tires are often designed with a priority on reducing weight and rolling resistance and are molded with slightly thinner sidewalls, shallower tread depths and use low rolling resistance constructions and tread compounds.
However, in order to understand CAFE tests and the roll that tires play, it is important to recognize that CAFE tests are conducted in a laboratory and not on the highway. Many aspects that affect fuel economy in the real world are reduced to "constants" incorporated into the formulas specified.
A vehicle's fuel economy is the direct result of its total resistance to movement. This includes overcoming inertia (Newton's Law), driveline friction, road grades, tire rolling resistance and air drag. In order to offer the same level of performance, heavy vehicles require more power (and more fuel) than light vehicles. All-wheel and four-wheel drive vehicles require more power than two-wheel drive vehicles; and boxy vehicles require more power than low drag aerodynamic vehicles.
But how much influence does each of these elements have and when are their influences felt? The relative percent of influence that these factors represent during stop-and-go city driving are very different then during steady, state highway driving.
During stop-and-go city driving, it's estimated that overcoming inertia is responsible for about 35% of the vehicle's resistance. Driveline friction is about 45%; air drag is about 5% and tire rolling resistance is about 15%.
Overcoming inertia no longer plays an appreciable role in the vehicle's resistance during steady speed highway driving. For those conditions it is estimated that driveline friction is about 15%; air drag is about 60% and tire rolling resistance represent about 25%.
Now, lets explore a scenario where a High Performance replacement radial tire has a whopping 20% increase in rolling resistance over a low rolling resistance Original Equipment standard passenger radial. To calculate the potential change in mpg resulting from using the High Performance tires in place of the Original Equipment tires, we would multiply the tire's percentage of influence in the vehicle's overall resistance (15% in the city and 25% on the highway) times the High Performance tires' 20% increase in rolling resistance.
If the vehicle equipped with standard Original Equipment low rolling resistance passenger tires normally provided 25 mpg in the city and 30 mpg on the highway, installing tires with 20% greater rolling resistance would only drop fuel mileage by a calculated 3% (to 24.25 mpg) in the city, and a calculated 5% (to 28.5 mpg) on the highway. While this is a measurable difference, it probably isn't much more of an influence on real world fuel economy than being stuck in rush hour traffic a couple of times a week or being stopped at every red light instead of continuing through a string of green lights.
Additionally, the easiest way to reduce rolling resistance to enhance fuel economy is to make certain that the tires are properly inflated. A vehicle that requires its tires to be inflated to 35 psi (based on the vehicle's tire placard) will have an increase in rolling resistance of approximately 12.5% if the tires are allowed to become underinflated to just 28 psi. Therefore, maintaining the vehicle manufacturer's pressure recommended for light load and heavy load conditions may almost be as important as the tires being used."
http://www.tirerack.com/tires/tirete....jsp?techid=29
Internal Combustion Engine (ICE) on Wikipedia. The five and six stroke engines are interesting.
http://en.wikipedia.org/wiki/Internal_combustion_engine
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