There is no reason the exhaust can't run short out the side near the front or mid way. The ELIO engine is small engine. The volume of exhaust will be small. Also long runs of an exhaust system created other problems. It the exhaust cools to much as it flow the performance of the engine is effected.
While not a good idea of the street you do see wrapped exhaust systems on motorcycles to increase exhaust temps . Faster flow increase top end HP.
I wonder if the exhaust system layout will stay that way when they do dyno testing with the full system on?
This IAV/EM engine is designed as a car engine so running from front to back in this vehicle would not be a long run. The more interesting thing to me is the number of tight turns in the exhaust however I am sure IAV is fully aware of this design so it is very likely it has been computer modeled with the engine so they understand what will happen in physical testing. IAV's Kody Klindt discussed exhaust routing, including mentioning it would run down the right side, back in August in Detroit so they have obviously been involved in this process as one would expect.