The ICE has no room to become carbon neutral with efficiencies that are even comparable to electrics. Getting from electricity to liquid fuel to movement probably has losses exceeding 90%. Electric cars on the other hand are like 80% efficient.
You are very wrong here. Ethanol as an ICE fuel could be done carbon neutral very quickly thru yeast, and battery technology will probably never reach comparable energy densities in weight limited applications (mobile applications). We may engineer a society where the limitations of batteries are not limiting (because we/goods never travel far), but only a fool thinks you need electricity as an energy source for carbon neutral ICE.
I think you're underestimating the amount of land you need to feed all that yeast.