The thinner the air, the more efficient your flight can be, but I never saw this as a temperature problem. My understanding is that there just isn't enough oxygen. Maybe there's an issue with the amount of heating that occurs when you try to compress enough air to get enough oxygen to run your engine?
Theory != Practice. If that were the only variable, then yes. Electric would be great. But it's not. It's far from the only thing in play. Lift also suffers from thinner air. Pure electric (as-in battery/solid state energy storage) could have 100% efficiency (specifically in converting prop/turbine torque to thrust of moving air), and it'd still have a terrible efficiency problem with current day tech.
Electric's primary efficiency and efficacy issue is regarding the total operating weight of the aircraft compounded by how that weight does not meaningfully decrease as the battery banks are depleted as compared to consumable fuels. Weight is your biggest enemy in flight, not power nor mechanical efficiency.
Hybrid electric (be it consumable fuel through a generator or fuel cells) is much more promising, but rarely what people mean when discussing "electric propulsion" (without the hybrid qualifier), and still has issues of it's own.
if you stay subsonic. I hear the U-2 has like 1-2kt of leeway when it is at its max altitude because if it went faster it would be supersonic but any slower and it would fall out of the sky.
In any case, electric engines don't need oxygen.