Except that water is cheap as fuck, and makes the oil companies nothing. A water powered car would be the end of oil companies, since water needs next to no processing for something like that. Sure, car companies would make a killing, but it would completely upset the economy. The price of oil would drop like a rock, and instead water would become expensive. (At least, for any motor that would consume the water)
People are afraid of change, and large companies are much more afraid of change than single people are. Just look a the RIAA/Record companies. They are completely outmoded and totally unnecessary now, and they are fighting like mad to keep in the game, simply because they are greedy. Oil companies are much greedier, and have a lot more lobbying power, too, which means anything that would fuck up the oil economy like a water powered car would be VERY quickly snuffed out/slowed down.