Energy cannot be created or destroyed, only converted among its various possible forms. This physical fact is known as the First Law of Thermodynamics. So what happens to all of the energy in a tank of gas? How much of it performs useful work and how much of it is wasted? Where are the losses? Of course for a vehicle, the useful end purpose is to move passengers and cargo. Anything else is waste. This excellent paper has a nice breakdown of where the energy goes. It considers a composite driving cycle including both highway and city driving. The results go as follows.
We start with 100% of the energy in the fuel, and the table shows where it goes.
|Cooling and Exhaust||32|
|Tire Rolling Resistance||5|
Irreversible combustion refers to the fact that during combustion, a portion of the energy is necessarily converted to forms not available to do work. That is a basic result of thermodynamics. No heat engine can escape this. A heat engine is one that generates work by using energy to heat a working fluid, and then allowing this hot working fluid to expand. The pressure generated during the expansion then does the work. By directly converting energy to work, for example in a fuel cell or electric engine it is possible to avoid this loss. However, automobiles are still overwhelmingly using the internal combustion engine. Car engines are definitely heat engines. They use the energy in the gasoline to generate heat by burning it with air as oxidizer. Then the air is heated up. The same hot air + combustion products serves as the working fluid.
The 30% lost to the cooling system and the exhaust is partly recoverable. Saving some of this energy is the basis for turbo compounding engines and six stroke engines.
Engine friction refers to losses in the moving parts of the engine itself. There are engine designs, like the Brickley engine that focus on reducing these losses. In particular, modern high precision machining techniques are allowing cheap production of complicated friction reducing designs. Machining tolerances have decreased as well, also allowing for new lower friction designs.
The numbers are representative of a typical vehicle averaged over a typical driving cycle. Under specific conditions, say going 60 MPH up a 3% grade, the values will break down slightly differently. Only 20% of the energy in your gas makes it out of the engine. That 20% is where you have control. You can't do much about thermodynamics or engine friction. But the 2% typically diverted to accessories represents 10% of the out of the engine energy. Reducing use of the air conditioner is an example of exerting control. The 5% of the total typically going to air resistance represents 25% of the past the engine energy and you can control that by reducing your speed.
The table shows that it is the engine designers of Detroit that will have to bear the largest part of the load on the way to better fuel economy. And if they won't do it, then there are plenty of smart engineers in the rest of the world who will do it and are doing it.