The government is banning stuff all the time. You are not allowed to do a plethora of things that harm other people or society (stealing? murder? destroying public property?). A ban on petrol/diesel car is nothing special.
Prohibition of alcohol would be a more apt comparison.
Cars physically hurt people even when they aren't hitting people.
I think your rule about possession being different from action doesn't hold water at all.
If you're an ultra-libertarian I think you need to get your externality philosophy straightened out first in your model of utopia.