Contrary to popular belief, motorsports aren't banned
When I first started researching why there isn't a single motorsport in the Olympics, I found time and again a reference to a supposed ban on motorized propulsion in the Olympic Charter itself. Here's the thing though... there's no such ban. This is the actual Olympic Charter on which the Olympics are governed. Out of 110 pages, there's not a single reference to motorsports, nor to modes of propulsion.
In fact, the only thing prohibiting motorsports from being featured in the Olympics is the refusal of the IOC to even consider it, and I can't find a single reason why.
Motorsports are, in fact, officially recognized by the Olympics
In order to be an official Olympic sport, that sport must first have its own international federation (IF), which in turn must be recognized by the IOC. Guess what? The IOC formally recognizes the FIA, or the Federation Internationale de l'Automobile... which, as it happens, has been around since 1904, and an IF's longevity is one of the things the IOC takes into account.
Further, the FIA is a member of the Association of IOC-Recognized International Sports Federations -- that's the same association as the IFs for karate, baseball & softball, sport climbing, skateboarding, and surfing, all of which are newly minted, bona fide Olympic Sports debuting (or returning) in 2020.
The IOC formally lists popularity and sponsorship opportunities as criteria
No. Really. This is the list of criteria the IOC uses when evaluating a sport for acceptance. Note the entire section dedicated to the universality and wealth of the sport, and bear in mind that virtually everywhere, from Brazil, to the whole of Europe, to India, Japan, Australia, and of course, the US, motorsports are immensely popular, and in various disciplines (more on those in a minute).
You want sponsorship? Car companies are practically begging to jump into the fray. In case you've missed it, there have been approximately 4,281 car ads since the week began. Team USA bobsleds? BMW. Team UK bobsleds? McLaren. Even the swimming team benefits from automotive involvement, with BMW's motion-tracking sensors helping Phelps, Ledecky, et al. perfect their every stroke. That's all at a huge cost, and all told, the cost of motorsports isn't that out of line with the cost of other Olympic sports, once you take training and specialized equipment into account.