Regenerative braking systems do recoup some of the inertial energy from both the car’s mass and the rotational energy from the wheels. However, none of this energy is free, and none of it is being wasted as the car traverses the tarmac. It’s all transferred to the car’s mass and to the wheels from the burning of gasoline (in traditional cars), or from batteries (in EVs) or some other form of power (hydrogen, French fry grease, or whatever). And the transfers/conversions all have losses. As the car traverses the tarmac, the energy is used to overcome resistance from the air, the friction and fluid resistances in the mechanical stuff in the powertrain, and from the rolling of the tires on the pavement. And few other details.
Ergo, the best approach rather than to attempt to recoup inertial energy is to attempt to minimize resistances that is has to overcome. Low rolling resistance tires, aerodynamics, and weight reduction are all attempts to do this. And they all come with tradeoffs. LRRs sacrifice traction. Aerodynamics can sacrifice utility. Weight reduction sacrifices ride, traction, and often utility… and when exotic materials are used to do it the cost rises.
In summary, inertial energy isn’t free. It has to be transferred from another power source to be there to recoup. It’s better to focus on reducing the amount that has to be transferred.
Oh, I almost forgot: a battery is sort of a super capacitor. Both store electrical energy by piling excess electrons on one side of a dielectric and leaving a relative electron deficiency on the other side, and both release that power through circuits when the two sides are connected. If resistance is in the circuits, they both release the surplus electrons in a controlled fashion. If the two side are shorted, both will discharge immediately.