Hey Louis
That's an interesting thought! I'm not an engineer of this particular field but I believe I could share some thoughts anyway! The efficiency of current electric motors is quite high already and new permanent magnet motors are even more efficient. Uses of permanent magnet motors in the automotive industry include the Chevy Volt, the Chevy Bolt, and Tesla Model 3.
So I don't see a way with added weight from water, moving parts and cooling(basically a electric steam engine) and so fort that the efficiency rate could get near of current electric motors. BUT they use rare metals that are getting more and more scarce and expensive so maybe there could be a niche market of somesort for this but it's out of my expertice!
"Efficiency of three-phase induction motors can vary from 85% to 96%.... Despite the AC induction motor being first developed more than 100 years ago, it’s still viable thanks to efficiency and performance improvements in the 20th and 21st century. The permanent magnet motor is a relative newcomer but promises higher performance and possibly lower weight."
https://www.horizontechnology.biz/blog/induction-vs-permanent-magnet-motor-efficiency-auto-electrification