I looked into this a while back, and they're able to get 50%+ thermal efficiencies by using their own modified thermodynamic cycle that promotes more complete fuel combustion, as well as arranging the engine components in such a way that the engine has low heat rejection qualities. Nearly doubling the efficiency of the typical ICE setup and doing so with large weight reductions far outweighs any issues with rotary seals. These things are so compact and simple that it would be feasible to simply drop an entirely new engine into your car and melt down the old one when the seals wear out. Not that it would come to that, but those are the kind of economics we're dealing with here. This is a legitimately nifty invention.
Trying to understand what is different and found this:
"The basic idea is similar to a Wankel rotary, but turned on its head. Where the rotor holds the seals in a normal Wankel, the housing does that job in the X1 engine. This allows significant reduction in oil consumption over a regular rotary motor. Other enhancements include direct injection, a high compression ratio at 18:1, and a dramatic change to the geometry of the combustion chamber, which maintains a constant volume during ignition. This change means the air-fuel mixture auto-ignites like a diesel, and can be burned much longer than normal. The result is a more complete combustion ending in low emissions and very high chamber pressures. This high pressure is allowed to act on the rotor until it reaches nearly atmospheric pressures, so almost all the available energy is extracted before the exhaust is physically pushed out. Again, this is different than a normal internal combustion engine, which releases very energetic, high-pressure exhaust gas."
Just doing a brief visual comparison from https://www.youtube.com/watch?v=0e785YnDmq0, the most immediate difference is the inversion of the housing and rotor shapes. Instead of a dorito shaped rotor like the wankel, it has a jelly bean shaped rotor. And instead of a jelly bean shaped housing, it has a dorito shaped housing.
Also, my memory of the workings of the wankel is a bit rusty, but I believe it is inherently balanced, so no counterbalance is necessary, but this one requires a counterbalance. On the other hand, unlike the wankel's one combustion chamber, this one has 3, so it doesn't need to deal with asymmetric heating issues. The combustion chambers themselves are very interesting. Due to the dorito shaped nature of the wankel rotor, there seems to be an inherent limit to the compression ratio because of the planar sides of the rotor can't get any closer to the wall of the housing. But on this one, the rotor can get completely flush with the housing, allowing more direct control over the compression ratio. Definitely an intriguing design.
